Regions Bank, headquartered in Birmingham, Alabama, agreed to pay the United States $4,919,631 to resolve allegations that it approved forgiveness of a Paycheck Protection Program loan that was ineligible for forgiveness, resulting in an improper federal payment to the bank [1]. The Department of Justice announced the settlement on May 22, 2026 [1].
The allegations fall under the False Claims Act, the federal statute that imposes civil liability on parties who submit false or fraudulent claims for government payment [1]. The PPP, created under the Coronavirus Aid, Relief, and Economic Security Act in 2020, authorized the Small Business Administration to guarantee loans made by approved lenders, including private banks, with the promise that loans meeting specific eligibility requirements would be forgiven and the government would reimburse lenders in full. Banks that certified ineligible loans for forgiveness and then collected government reimbursement exposed themselves to FCA liability, which can reach treble damages plus per-claim civil penalties. The settlement amount, just under $5 million, reflects a negotiated resolution rather than an admission of liability.
Regions Bank is one of the largest financial institutions in the southeastern United States, with operations spanning retail banking, commercial lending, and wealth management across multiple states [1]. The DOJ's resolution follows a sustained federal enforcement posture targeting COVID-relief fraud across both borrower and lender channels. Federal prosecutors and civil enforcement attorneys have pursued PPP-related False Claims Act cases against lenders whose forgiveness certifications are alleged to have been deficient, building a body of civil settlements that complement the criminal PPP fraud cases filed against individual borrowers and loan processors in prior years.
The settlement resolves the civil allegations without a finding of liability [1]. No individual Regions Bank officers or employees were named in the publicly disclosed resolution. The bank's cooperation with the investigation and agreement to settle are consistent with DOJ policy encouraging early resolution of FCA matters in exchange for reduced exposure below the statutory damages ceiling.
Federal enforcement of pandemic-era lending programs is expected to continue through the remainder of the decade, as the False Claims Act's extended statute of limitations provides the government additional runway to pursue remaining targets among lenders, servicers, and borrowers whose files remain under review.