How The Bank Of America Is Dealing With The Coronavirus Crisis
MARY LOUISE KELLY, HOST:
On a day when the U.S. unemployment rate soared to nearly 15%, the worst level since the Great Depression, we're thinking about all the Americans affected, all the jobs lost - 20.5 million in April. And it seemed a good day to hear from one of the major stakeholders in the U.S. financial system, not to mention a major employer.
Brian Moynihan is the CEO of Bank of America. He joins me now. He's on the line from Boston. Mr. Moynihan, welcome.
BRIAN MOYNIHAN: It's good to be here. Thank you for having me.
KELLY: I wonder if you would start with how this moment is playing out at Bank of America itself. More than 200,000 people report to you. You have done no layoffs, and more stunningly, you've committed to doing no layoffs through the end of 2020. How are you managing that in this moment when so many jobs are being cut?
MOYNIHAN: I think we need to back up and, as always, remember that this is a health care crisis that is having economic consequences. And today you saw the statistics, the tragedy of the job loss increases that you saw out there. But in dealing with that health care crisis, our view is that we - our job is here to help drive that, and to do that, we need these talented teammates we have, the 200,000-plus people who've been working every day. We're open - we're not closed - serving our clients, helping.
You know, in the first quarter, we made $70 billion of additional loans and $140 billion in deposits and then the PPP program and helping with the EIP program, the $1,200 stimulus checks program, making sure that employees can get those and our branches are open every day. And so we've made a commitment to no layoffs. Our approach has always been employee-centric and customer-centric, and we made a commitment - no layoffs through the end of the year. And...
KELLY: Have you ruled out furloughs as well?
MOYNIHAN: We've actually been hiring people. We probably hired 2,000 people in the month of March and another couple thousand in April probably just to replace people who - and add people who we need to service our clients.
KELLY: Let me turn you to the PPP, the paycheck protection program, which was intended to help small businesses. You have a role there because while the money is managed by the Small Business Administration, it's being distributed through banks, among them yours. And I want to put to you a couple of the questions being raised about banks raking in big fees from PPP. Bank of America, I understand, has, as of this week, made more than $250 million in fees for processing these loans. Is that correct?
MOYNIHAN: We have not received a fee to date because the fees are due later, but we've already made the pledge. Frankly, revenue we get after our cost will be deployed to low- and moderate-income housing, to CDFIs - community development financial institutions - to charitable work. So we won't make money off this program. We just have to cover our costs, and then we'll give the money to programs that we have to support small business and communities throughout the country.
KELLY: I just want to make sure I understand exactly what you're saying, and I appreciate your laying out for me the detail there. The number I cited of more than $250 million in fees the bank has made for processing these loans - and I understand you're saying you haven't seen any of that money yet. That will be yet to come. But are you saying that that 250 million or whatever the final number is - you're giving all of that?
MOYNIHAN: Yes. We said it earlier this week when we put out the statistics, where we said that the net proceeds will be given to those types of charity, LMI housing, small business support, CDFI support. But on top of the huge programs we already give, we'll add more money to those.
KELLY: How do you decide what the net proceeds are?
MOYNIHAN: We have costs in that we had to hire 3,000 people to come work in a company to do this, people working overtime. And so we'll figure it out. But the idea is we give away $250 million a year to charity. We added $100 million since the crisis on top of that 250. We had a billion and a half dollars out to CDFIs. We now added another 250 million to - we're one of the largest charitable enterprises, so we'll figure it out. And we'll make the contributions and do it in a way that will support the areas that we think are important to help the United States and the rest of the world recover.
KELLY: OK. So just again - bottom line, you're saying you will not be making any money off...
KELLY: ...Working in this program despite the fact that you've had to hire a few thousand people to help you staff it.
MOYNIHAN: Yep. Yep.
KELLY: I wonder, you know, as you look long-term - right now we're right in the thick of this economic and health crisis. But do you think 10 years from now, when we look back, your industry - banking - will look significantly different in this country?
MOYNIHAN: I think all industries are going to look different because the four or five major trends that were going on won't be changed by this situation. And what people told me 30 years ago when I started the industry - there wouldn't be any bank branches because look at the trends in, you know, the early days of the Internet 20 years ago, et cetera. There'll never be a bank branch. Well, we have 4,300 of them, and on Monday 875,000 people came into them. And so customers will do - like to have high touch and high tech, as we call it. They like to conduct business face to face and have the digital platforms. And so you're seeing that digitization move a little faster. It's a relentless trend of which this will add to it - obviously, won't detract from it. But it was a trend it was going to go on if we didn't have a pandemic or not.
KELLY: Brian Moynihan - he is CEO of Bank of America. Great to speak to you. Thanks so much for your time.
MOYNIHAN: Thank you. Transcript provided by NPR, Copyright NPR.