House panel finds fintech PPP screens let fraud through; Bluevine improved only under bank pressure

What happened?

The Select Subcommittee opened its inquiry into Kabbage, Bluevine and their partner banks Cross River Bank and Celtic Bank in May 2021 and added Blueacorn and Womply in November 2021. Its staff report, "We Are Not the Fraud Police": How Fintechs Facilitated Fraud in the Paycheck Protection Program, released on 1 December 2022, found that "many of these companies appear to have failed to stop obvious and preventable fraud" and that at least tens of billions of dollars in PPP funds were likely disbursed to ineligible or fraudulent applicants, often with fintech involvement.[1][2]

For Bluevine, which helped deliver $8.9 billion in PPP funds to over 300,000 small businesses, the report found that "numerous fraudulent applications passed through Bluevine's systems". It cited a $1.9 million loan approved in May 2020 on IRS forms repeating identical figures across four quarters, a second fraudulent application approved from the same IP address a week after the first was rejected, and court records alleging approvals after its systems linked several applications to one IP address. One convicted fraudster texted a co-conspirator that "it's all automated" while urging applications to Bluevine. Celtic Bank's records showed 1,557 of its 1,723 confirmed fraud cases, as of mid-May 2021, were Bluevine-processed loans.[1]

The report credited Celtic Bank's oversight with improving Bluevine's controls: Celtic met Bluevine's risk teams daily, then three times a week, and pressed it to introduce new software and manual review processes in the first months of the program. Bluevine's own analysis found the new checks would have caught 78% of previously approved fraudulent applications, and Celtic estimated Bluevine's rate of fraudulent loan funds fell from 8.54 percent in first-draw loans to 0.08 percent in second-draw loans. The report still found Bluevine's delays in fraud reviews caused Celtic to file suspicious activity reports late.[1][4]

The other fintechs fared worse. At Kabbage, applications from a fraud ring using forged W-3 forms for identical loan amounts "had passed all of the automated screenings Kabbage had in place" and were caught only by the receiving banks. A Blueacorn supervisor said reviewers saw fraud "that the automated checks did not detect" but were told to keep pushing applications through. Womply ran automated eligibility, identity and document checks for its "PPP Fast Lane" service, which partners said referred applications containing "rampant fraud".[1][3]

When did it happen?

1. Apr 2020

   Bluevine begins processing PPP loans with partner banks Celtic Bank and Cross River Bank.[1]

2. Jun 2020

   New fraud controls added at Bluevine under pressure from Celtic Bank are followed by a steep fall in fraud incidents, according to the report.[1]

3. May 2021

   The Select Subcommittee opens its investigation into Kabbage, Bluevine and their partner banks.[2]

4. Nov 2021

   The investigation expands to Blueacorn and Womply.[2]

5. Dec 1, 2022

   The Select Subcommittee releases its staff report and refers findings to the SBA, the SBA Inspector General and the Justice Department.[1][2][3]

What was the impact?

• Financial: At least tens of billions of dollars in PPP funds likely disbursed to ineligible or fraudulent applicants (program-wide estimate)[1]
• Customers: Celtic Bank confirmed 1,557 fraud cases on Bluevine-processed loans as of mid-May 2021[1]
• Other: Bluevine's rate of fraudulent loan funds was estimated at 8.54 percent in first-draw loans and 0.08 percent in second-draw loans; late suspicious activity reports were filed on Bluevine-processed loans.[1]

Severity 4 of 5: A congressional finding of large losses across several fintechs: the report said at least tens of billions of dollars in PPP funds likely went to ineligible or fraudulent applicants, often with fintech involvement; no enforcement action followed against Bluevine.

How did Bluevine Inc., Womply (Oto Analytics, Inc.), Blueacorn and Kabbage respond?

Bluevine said: "We are proud to have participated in the PPP program during a time that was truly extraordinary. As the subcommittee noted, all fintech companies are not the same, and Bluevine adapted to the ongoing threats better than some of the other fintech companies examined in the inquiry." KServicing, the Kabbage spin-off, said the report did "the American people a disservice by parsing bits of information out of context", and Celtic Bank said it "made extensive and effective efforts to combat fraud". Representatives for Womply and Blueacorn did not immediately respond, according to Bloomberg News.[3][4]

What was the outcome, and did regulators act?

The report is a congressional staff finding, not an enforcement action. Chairman James Clyburn wrote to the SBA, the SBA Office of Inspector General and the Justice Department to refer its findings, including evidence that some fintech owners may themselves have committed PPP fraud. BankingNewsAI found no enforcement action against Bluevine arising from the report as of 21 October 2026.[2][3]

1. "We Are Not the Fraud Police": How Fintechs Facilitated Fraud in the Paycheck Protection Program (staff report) official
   U.S. House Select Subcommittee on the Coronavirus Crisis · Dec 1, 2022
   “As with other PPP facilitators, numerous fraudulent applications passed through Bluevine's systems.”
2. New Select Subcommittee Report Reveals How Fintech Companies Facilitated Fraud in the Paycheck Protection Program official
   U.S. House Select Subcommittee on the Coronavirus Crisis · Dec 1, 2022
   “Federally regulated bank partners successfully pushed Bluevine to improve its controls during the PPP, likely reducing fraud.”
3. Fintechs' lax oversight enabled PPP fraud, report says news
   American Banker (Bloomberg News) · Dec 1, 2022
   “"As the subcommittee noted, all fintech companies are not the same, and Bluevine adapted to the ongoing threats better than some of the other fintech companies examined in the inquiry."”
4. Panel blasts fintechs for missing 'obvious and preventable' PPP fraud news
   Banking Dive · Dec 2, 2022
   “Bluevine, however, still faced difficulties in facilitating timely reporting of fraud to law enforcement, according to the report.”