Profiles, Inc. v. Bank of America Corporation, 453 F.Supp.3d 742

Background:

Congress enacted the CARES Act (including the Paycheck Protection Program, PPP) to provide federally guaranteed loans to small businesses; SBA issued an Interim Final Rule implementing PPP.
Bank of America (BofA) initially limited online PPP applications (Apr 3, 2020) to customers with a preexisting borrowing relationship; Plaintiffs (Profiles, Elite, Proline, Diaspora, et al.) were blocked or delayed.
On Apr 4, BofA revised its policy to permit depository-only customers to apply only if they did not have a business credit/borrowing relationship with another bank; some plaintiffs allege this prevented timely applications.
Plaintiffs filed a Second Amended Complaint and moved for a Temporary Restraining Order and Preliminary Injunction to enjoin BofA’s application restrictions; a hearing was held Apr 10, 2020.
The court denied the motion, concluding plaintiffs failed to show a private right of action under the CARES Act, and alternatively failed to satisfy the remaining injunction factors (irreparable harm, balance of equities, public interest).

Issues:

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the CARES Act creates an implied private right of action allowing PPP applicants to sue lenders	CARES Act gives applicants a statutory right to apply for PPP loans and Congress’s language (e.g., “any business concern”) implies enforcement by private suit	Congress did not create a private cause of action; SBA/CARES enforceability lies with administrative civil/criminal remedies and not private suits	No implied private right of action; plaintiffs fail to show Congressional intent to create a private remedy
Whether BofA’s application restrictions violate the CARES Act eligibility scheme	BofA’s “gating” and refusal to accept applications from customers with borrowing relationships elsewhere effectively imposes unlawful eligibility criteria contrary to §1102	CARES Act lists certain considerations but does not prohibit lenders from adopting reasonable processing/prioritization rules; BofA’s policy is aimed at efficiency and is consistent with statutory text	BofA’s criteria do not contravene the CARES Act’s plain language; courts will not read extra constraints into the statute
Whether plaintiffs will suffer irreparable harm absent injunction	Delay or denial of first-come, first-served PPP funds causes irreparable business harm that money damages cannot remedy	Plaintiffs can apply to thousands of PPP lenders; injury is speculative or self‑imposed by failing to seek other lenders; some plaintiffs have pending applications elsewhere	Plaintiffs failed to show imminent, irreparable harm; speculative loss of opportunity insufficient
Whether the balance of equities and public interest favor injunctive relief	Harm to small businesses and lost time justify an injunction to prevent lender-imposed barriers	Injunction would disrupt voluntary PPP participation and could disincentivize lenders, reducing overall program effectiveness	Balance of equities and public interest favor denial; courts should avoid imposing mandatory injunctions that could frustrate Congress’s PPP goals

Key Cases Cited

Winter v. Natural Res. Def. Council, 555 U.S. 7 (2008) (standard for preliminary injunction requires likelihood of success, irreparable harm, balance of equities, and public interest)
Cort v. Ash, 422 U.S. 66 (1975) (multi‑factor test for inferring an implied private right of action)
Alexander v. Sandoval, 532 U.S. 275 (2001) (a private right of action must be created by Congress in the statute)
Planned Parenthood S. Atl. v. Baker, 941 F.3d 687 (4th Cir. 2019) (interpreting rights‑creating statutory language and §1983 enforcement implications)
Crandal v. Ball, Ball & Brosamer, Inc., 99 F.3d 907 (9th Cir. 1996) (SBA does not imply a private right of action)
Di Biase v. SPX Corp., 872 F.3d 224 (4th Cir. 2017) (irreparable harm must be likely and not self‑inflicted; speculative harm insufficient)
Direx Israel Ltd. v. Breakthrough Medical Corp., 952 F.2d 802 (4th Cir. 1991) (speculative future threats do not justify injunctive relief)
Mountain Valley Pipeline, LLC v. 6.56 Acres of Land, 915 F.3d 197 (4th Cir. 2019) (mandatory injunctions that alter the status quo are disfavored)
Munaf v. Green, 553 U.S. 674 (2008) (temporary restraining orders and preliminary injunctions are extraordinary remedies)