House panel says lax screening helped facilitate PPP fraud

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December 1st, 2022

House Majority Whip James Clyburn, D-S.C., leaves the chamber at the Capitol in Washington, Nov. 17, 2022. Financial technology firms abdicated their responsibility to screen out fraud in applications for a federal program designed to help small businesses stay open and keep workers employed during the pandemic, a report by a House investigations panel said Thursday, Dec. 1. The House Select Subcommittee on the Coronavirus Crisis, chaired by Clyburn, launched its investigation of the firms in May 2021 after public reports that the firms were linked to disproportionate numbers of fraudulent loans issued under the Paycheck Protection Program. (AP Photo/J. Scott Applewhite, File)

Financial technology firms abdicated their responsibility to screen out fraud in applications for a federal program designed to help small businesses stay open and keep workers employed during the pandemic, a report by a House investigations panel said Thursday.

The House Select Subcommittee on the Coronavirus Crisis launched its investigation of the firms in May 2021 after public reports that the firms were linked to disproportionate numbers of fraudulent loans issued under the Paycheck Protection Program.

Former President Donald Trump rolled out the Paycheck Protection Program to help small businesses stay open and keep their workers employed. President Joe Biden maintained the program and directed money to more low-income and minority-owned companies. All told, $800 billion was spent on the program.

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