A congressional subcommittee issued its final report Thursday about financial fraud supercharged by online lending during the pandemic, which alleged executives and their families enriched themselves through government relief programs.
Rep. James Clyburn, D-S.C., chairman of the Select Subcommittee on the Coronavirus Crisis, focused much of the 130-page report on Womply and Blueacorn, both of which emerged as major players that fused tech and financing to speed up lending through the government’s Paycheck Protection Program.
Womply had no lending experience before COVID-19 and Blueacorn did not exist, yet together the companies captured more than $3 billion in fees – eclipsing their direct competitors.
The startups are not banks but worked as middlemen, marketing to struggling businesses and quickly approving loans with partner banks, backed by the Small Business Administration. The companies make their money through a government-paid fee for facilitating the loans.
