Let me tell you about Ember, a small business owner. Her PPP loan through Bank
BAC
of America was approved for $76,773. A year later, BofA sent her an email that they were retroactively qualifying her for just $4,377! Is this really how Bank of America chooses to treat their best customers?
I wrote in April of 2021 and again in July of 2021 about Bank of America’s horrendous treatment of its customers and abysmal customer support. But it now appears that the treatment was even worse than I described and that the Bank is taking no responsibility for its business-destroying incompetence in handling PPP.
Let me tell you about Ember Seaman, a small business owner of Mad Ethel’s Tattoo, LLC located at 711-B North Person Street, Raleigh, North Carolina 27604. Ember’s a single mom with two small children. She’s also a two-decade-long client of Bank of America. When COVID struck, Ember received an email from BofA with the exciting news that a loan with full future forgiveness was available provided the business use 75 percent of the loan to cover payroll.
She applied right away through Bank of America’s Intralinks portal, on which there were two modes of entry: W2 businesses and 1099 Independent Contractor businesses. She went the 1099 route. There were no live persons to talk to; no chat options. Emails specified that you could not reply. If you did not have the correct documentation, the system simply kicked back your application with no explanation until you got it right
Ember submitted her application on April 13. On April 30, BofA sent her an email confirming that all her documentation, including the 1099 documents they required, had been uploaded correctly.
On May 3, her loan was approved for $76,773, based on her business’s 1099. On May 4, her loan was issued. On May 6, the SBA changed its guidelines to disallow 1099-based payments as qualified PPP wages. Ember learned nothing of the May 6 change of guidelines for an entire year. But the SBA states clearly on its website that its rules as of the time a loan is funded are determinative.
Bank of America’s email stated that 75 percent of the lent funds needed to be paid out in eight weeks. At some point, this requirement morphed into paying 60 percent in 24 weeks. Rumors surfaced about other amounts and time frames. In any case, Ember paid out all the PPP funds within eight weeks to be safe.
Months later, Ember received a call from an excited Bank of America representative stating that forgiveness has become simpler, and only consisted of answering a few questions on an online questionnaire that would take just 15 minutes to complete. Ember provided the answers.
There was no place to upload documents or proof of payments. Ember waited patiently, week after week, to receive news that her loan had been forgiven. Instead of such a notice, she repeatedly received an identical email from BofA stating that they were reviewing her request before submitting it to the SBA.
A year after Bank of America decided Ember had qualified for small business relief money, it sent her an email that they were retroactively qualifying her for just $4,377! Confused and panicked, Ember called the phone number in Bank of America’s email, an answering system that consistently hangs up on callers. Nine out of 10 calls get dropped.
After finally getting through, she was informed by BofA reps that BofA had made changes based on SBA rule changes that disqualified independent contractors. The BofA rep told Ember that “independent contractors could have applied for themselves” because they qualify as their own businesses.
Other than that, the reps as well as the senior manager who Ember got on the phone said they a) were “sorry,” b) did not know why BofA requested proof of Ember’s business’s 1099s, and c) did not know why BofA based its loan amount on the 1099s she was asked to upload.
She was also told that BofA was, at the time, giving out money as quickly as possible, so it was really hard for the bank to carefully consider all provided information. Ember searched BofA’s behavior online, learning that the bank may have required proof of independent contractors’ pay in order to qualify her business as a legitimate business
Fine if it did. But it gave Ember and millions of other small business owners who hire independent contractors the impression that they would receive a forgivable loan to keep hiring their contractors, Instead, they were duped into borrowing far more money from BofA than they could possibly afford. The story gets worse. None of Ember’s subs had employees or 1099 subcontractors, so no one was in a position to apply on their own for PPP funds.
I asked Ember to sum up her mistreatment that is driving her out of business.
As far as I can see, in asking for documents and approving a loan based on documents that did qualify and then disallowing the rules and regulations to protect my loan and rights, Bank of America operated in a fraudulent and negligent manner and now expects small business owners to pay for their mistakes if not intentional entrapment
Since Ember can’t get anywhere with Bank of America, she’s called her local SBA chapter. They informed her that BofA is wrong and that the SBA has seen numerous cases of this so far. The culprit in all cases is the Bank of America.
Again, here’s Ember
The SBA rep emails me and Bank of America, pleading that Bank of America stop their pre-screening, as lenders are not allowed to prescreen forgiveness. This is solely the authority of the SBA itself even though BofA persists in prescreening. In the email he includes the SBA guidelines that state that “Borrowers and lenders may rely on laws, rules, and guidance available at the time of the relevant application.” (PPP FAQ Question #17.)
I called Bank of America with this information, and the person I talk to seems to not know what to do with the information and states that I am not allowed to talk to anyone else.
I have now had dozens of calls with Bank of America and SBA representatives, had two escalations, and submitted two complaints against Bank of America with the Consumer Financial Protection Bureau. I received one phone call resulting from the first complaint from a lady saying that she was looking into the case and would get back to me.
Thus far I have received no responses to my emails to Bank of America, received no calls back from anyone working on the case, and have not heard back from the lady looking into it. I asked what company she works for, and her answer was no surprise; Bank of America.
Clearly, Bank of America has found a way to pocket millions of SBA dollars while conducting fraudulent or negligent business with their clients
I can’t speak for how many other small businesses are being affected in this way. As for myself, I was given money that was based on the documents I was asked for and provided correctly
Forgiveness was dangled in front of me if I paid it out correctly. Now, Bank of America is going against SBA guidelines, ignoring the SBA’s pleas, and essentially trying to force me to have given away tens of thousands of dollars from my own pocket, while my business was closed for months, made no income, and accrued expenses while I survived on credit.
This relief money has become a way to effectively put me and similar small businesses under. It has been 15 months since I was awarded my loan. I have nine months to make full repayment if forgiveness is not awarded.
For me, repaying $77,000 over nine months means not paying rent or bills in full. It means no Christmases, Easters, birthdays, or vacations with the kids. It means no college savings, no retirement, and no unforeseen expenses
Is this really how Bank of America chooses to treat their best customers
Ember now has less than one month to receive forgiveness. She is now trapped in a vicious cycle where she needs to unapply for forgiveness due to BofA’s specifying the $4K amount, but also needs to apply in order to have the option to receive the appropriate full forgiveness.
There may be one competent person in this incredibly incompetent company. His name is Brian Monyihan. He’s the CEO of Bank of America. Brian, let me urge you to pick up your phone and call Ember and help her and the thousands if not tens of thousands of other BofA victims get the forgiveness they are due.
Otherwise, you will be personally responsible for your company’s ongoing malfeasance. Whether that’s a legal matter is beyond my pay grade. But it’s surely a matter of morality and whether you will be able to sleep at night.