In March 2020, when a deadly global pandemic hit our communities, the White House convened America's leading banks to respond. At that time, no one knew the full extent to which these impending public health and economic crises would affect our families, our small businesses, and our economy, but we did know bankers were uniquely positioned to help. Since then, bankers have been laser focused on delivering for the communities they serve. Next week, the CEO’s of four of the nation’s leading banks have an opportunity to tell the story before Congress of what has transpired since meeting in that Cabinet Room some 14 months ago. Here’s why lawmakers and the American people should listen.
Immediately following the passage of historic bipartisan legislation, bankers worked day and night to implement new federal programs to deliver emergency relief directly to the American people, including distributing economic impact payments to mothers, fathers, and caregivers across the nation who needed help fast. Bankers also advised customers to prepare for the uncertainty surrounding the pandemic, offering financial planning and new lines of credit, even as they contended with the same challenges so many families faced, including taking care of their children – home from school and without childcare – and constant technological glitches.
From the onset of the pandemic, when nearly every business had closed their physical locations, bankers did whatever they needed to do to continue providing services and safely re-open. Early on, tellers and loan officers risked their own health to provide financial solutions for their customers in-person, all while their own cities and towns were completely shut down.
Bankers, in coordination with the Small Business Administration, also built the infrastructure to facilitate the Paycheck Protection Program, an entirely new federal program designed to keep employees on payroll and help employers cover rent, utilities, and other operating costs. Through the PPP, bankers issued 30 years’ worth of SBA loans in just the first two weeks of operation, totaling more than $342 billion. In just one year, lenders issued 166 years’ worth of SBA loans, with large banks distributing more than half of the $780 billion lent through the program.
Many of the nation’s leading banks reallocated significant internal resources to administer the program. Their employees worked around kitchen tables and throughout weekends to process applications. It was an all-hands-on-deck effort, with even senior bank executives rolling up their sleeves to process loans. The result? Bankers helped save millions of small businesses, ensuring that hardworking Americans could continue to put food on their tables.
Bankers also served as a resource for small businesses, listening to their concerns and providing constant guidance that, at times, was missing from federal agencies, helping them navigate 132 different rule changes, procedural notices, form revisions, and FAQ’s from the SBA.
Bankers also fought to ensure the program’s forgiveness process was simplified for loans less than $150,000, in response to the concerns of small business owners like Clint Harris in Delaware who said, “The last thing we need to be spending our time and resources on right now is filling out lengthy, bureaucratic paperwork.” These efforts succeeded in providing the equivalent of $7 billion of additional small business relief.
Recognizing that the public health and economic impact of the pandemic was more severe in certain communities, banks invested heavily in minority-owned small businesses in low- and moderate-income neighborhoods across America, with J. P. Morgan Chase, Bank of America, Wells Fargo, and Citi working to address growing economic and racial inequities.
COVID-19 has posed a unique threat to our nation – an invisible enemy that has threatened our way of life and took the lives of more than 500,000 of our family members, friends, neighbors, and coworkers. Just as all of us have done our part to protect each other, bankers answered the call to serve the American people and sustain our economy at a time when we needed them most. More than 14 months after that meeting in the Cabinet Room of the White House, millions of economic impact payments have been distributed and the Paycheck Protection Program is winding down.
As FDIC Chair Jelena McWilliams recently said, the nation’s leading banks “served as a vehicle to [economic] recovery,” helping consumers and small businesses not only survive, but thrive. If COVID-19 has taught us any lesson for the future, it is that America will be faced with unexpected hurdles that challenge our resolve. Fortunately, banks will be ready and willing to help.
