DOJ subpoenas big banks over info on loans to small businesses: report

The Department of Justice (DOJ) has issued grand jury subpoenas to some of the country’s largest banks regarding Congress’ $660 billion Paycheck Protection Program (PPP) as the department investigates potential abuse of the funds meant to help small businesses during the coronavirus pandemic, sources told Reuters.

The subpoenas don’t necessarily indicate wrongdoing by the banks, but do underline the growing concern from the government that the funds have gone to those who don’t need them.

The PPP was initially created by Congress’ $2 trillion CARES Act. Wildly popular, the starting allotment of funds quickly ran out, prompting Congress to add hundreds of billions of dollars more to the program in a subsequent stimulus package. 

The program gives small businesses loans that are forgivable if the businesses use the money to cover payroll and other essential expenses.

Treasury Secretary Steven Mnuchin has said companies that lied to get funds could face prosecution. He also directed publicly traded companies who received loans from the program to return the money by May 14 or face legal action.

Grand jury subpoenas allow prosecutors to access a wide range of private financial information while hearing witness testimony.

“Right now, we don’t think banks are 100% the target,” one of the sources told Reuters. “There are concerns that there will be a boomerang effect six months down the road on banks that they didn’t do enough.”

Another source told the news wire that the department wanted to check banks’ records for potential illegal activity by borrowers. The name of the banks subpoenaed weren’t listed, but data shows that Citigroup, Bank of America, Wells Fargo and JPMorgan Chase were some of the largest banks to participate in the program, Reuters says.

DOJ declined the news service’s request for comment. The Hill has also reached out to the department for comment.