Regions Bank to Pay $4.9 Million to Settle Claims Tied to Ineligible PPP Loan

Posted May 28, 2026

By the Constantine Cannon Whistleblower Team

Alabama-based Regions Bank has agreed to pay the government $4,919,631 to resolve allegations that it improperly received payments from the United States after approving forgiveness of a customer’s Paycheck Protection Program (PPP) loan around Aug. 3, 2021. The PPP loan was ineligible for forgiveness.[1]

The United States additionally alleged that Regions Bank was “unjustly enriched by the payment the SBA made to Regions Bank upon forgiveness of the PPP loan.”[2]

CARES Act and PPP Loans

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law in 2020. It was intended to offer emergency relief and funding to individuals, families, and businesses impacted by the COVID-19 pandemic. During this time, the Paycheck Protection Program, managed by the Small Business Administration (SBA), provided forgivable loans to eligible small businesses. The PPP provided eligible businesses with forgivable loans through two rounds of funding. To apply for a second-draw PPP loan, an eligible borrower had to certify it met program requirements, including that it and its affiliates had less than 300 employees.

Comments on the Case

Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division said: “The PPP was intended to provide critical assistance to eligible businesses during the economic uncertainty caused by the COVID-19 pandemic. The department is committed to ensuring that PPP lenders are held accountable for failing to comply with applicable program requirements, including approving forgiveness of PPP loans that were not eligible under program rules.”[3]

According to Constantine Cannon partner Marlene Koury: “The government remains focused on combating COVID-19–related fraud. Whistleblowers can play an important role in identifying schemes that misuse public funds and programs meant to support people during times of crisis.”

How Can Whistleblowers Report COVID-19 or PPP Fraud?

While it is unknown whether a whistleblower was involved in this case, many False Claims Act cases, including FCA cases involving allegations of COVID-19 or PPP fraud, are often initiated by whistleblowers (or relators). Under the qui tam (or whistleblower) provisions of the FCA, private parties can file lawsuits on behalf of the government and receive a share of the monetary recovery as a reward.

Our Firm Helps Whistleblowers

Our firm has extensive experience representing whistleblowers. If you believe you have a case, please contact us and we will connect you with an experienced whistleblower attorney.