Did FinTech Lenders Facilitate PPP Fraud?

Journal of Finance, Forthcoming

115 Pages Posted: 18 Aug 2021 Last revised: 17 Aug 2022

See all articles by John M. Griffin

John M. Griffin

University of Texas at Austin - Department of Finance

Samuel Kruger

University of Texas at Austin - Department of Finance

Prateek Mahajan

University of Texas at Austin, Department of Finance

Date Written: August 15, 2022

Abstract

In the $793 billion Paycheck Protection Program (PPP), we examine metrics related to potential misreporting including non-registered businesses, multiple businesses at residential addresses, abnormally high implied compensation per employee, and large inconsistencies with jobs reported in another government program. These measures consistently concentrate in certain FinTech lenders and are cross-verified by seven additional measures. FinTech market share increased significantly over time, and suspicious lending by FinTechs in 2021 is four times the level at the start of the program. Suspicious loans are being overwhelmingly forgiven at similar rates to other loans.

Keywords: FinTech, Paycheck Protection Program (PPP), Misreporting, Fraud

JEL Classification: G21, G23, G28, H12

Suggested Citation

Griffin, John M. and Kruger, Samuel and Mahajan, Prateek, Did FinTech Lenders Facilitate PPP Fraud? (August 15, 2022). Journal of Finance, Forthcoming, Available at SSRN: https://ssrn.com/abstract=3906395 or http://dx.doi.org/10.2139/ssrn.3906395

John M. Griffin (Contact Author)

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States
512-471-6621 (Phone)

HOME PAGE: http://www.jgriffin.info

Samuel Kruger

University of Texas at Austin - Department of Finance ( email )

Red McCombs School of Business
Austin, TX 78712
United States

Prateek Mahajan

University of Texas at Austin, Department of Finance ( email )

Austin, TX
United States

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