In an internal memo to employees on Tuesday, JPMorgan said it has seen "instances of customers misusing Paycheck Protection Program Loans, unemployment benefits and other government programs," noting that "some employees have fallen short, too."
"Unfortunately, we’ve also seen conduct that does not live up to our business and ethical principles — and may even be illegal," the memo, sent Tuesday, said.
It's unclear how many employees may have misused the program, or whether JPMorgan has already taken disciplinary action against workers. The bank declined to comment beyond the memo.
The New York-based bank urged employees to report concerns to their managers or through a separate hotline if they see improper conduct.
At the end of March, Congress approved a massive $2.2 trillion stimulus package, which established the Paycheck Protection Program, a rescue fund designed to help keep small businesses afloat and avert mass layoffs during the pandemic.
JPMorgan was the nation's largest participant in the $670 billion program, approving more than 280,000 loans worth more than $32 billion, according to the Small Business Administration. Through the program, businesses with fewer than 500 employees could apply for loans of as much as $10 million each; so long as 60% of that money went toward maintaining payroll, the federal government will forgive it.
The program's rollout was met with criticism as multimillion-dollar loans went to large, public companies -- even as small businesses languished.
In mid-April, a group of small business owners filed lawsuits against some of the nation's biggest banks -- including JPMorgan -- accusing them of reshuffling applications to frontload businesses seeking higher loans, thereby boosting their own profits.