The CEO of Bank of America said the impact of the $2.2 trillion in federal relief is beginning to reap benefits.
In an interview on CNBC’s “Closing Bell,” on Friday (May 1) Bank of America CEO Brian Moynihan said the combined elements of the CARES Act are coming together to jumpstart the economy.
“You will see now how, as it plays out over the next few weeks, the impact of these stimulus plans all hitting at once,” he said. “You’re having the PPP (Paycheck Protection Program) going out the door relatively quickly, unemployment insurance benefits being distributed and the stimulus checks have gone out, all that as the Federal Reserve has stabilized assets by class.”
On Bank of America’s distribution of PPP funds this week, Moynihan said after some initial glitches on Monday, the Small Business Administration (SBA) fixed the bugs and the application process has improved “dramatically.”
“This has been a heck of a week in the history of the PPP,” he said. “The numbers are staggering.”
He said Bank of America has processed 231,000 PPP loans representing about $24 billion.
Asked whether the loans are reaching the small businesses as was intended, Moynihan said 98 percent of the applicants have fewer than 100 employees and 76 percent have fewer than 10 workers. The average loan is for about $100,000, he added.
All those customers have to do, he said, is “get the documents back to us and the money goes into their accounts relatively quickly.”
Host Wilfred Frost asked Moynihan if loan processors have flagged large companies who may technically be allowed access to PPP funds but don’t fit the spirit of the law.
“It’s not our responsibility, that’s the customer’s responsibility,” he said. “But don’t miss the broader point … It is a broad-based program and (the money is) going where Congress wanted it. The changes the program made were meant to eliminate those things.”
PPP reopened on Monday (April 27) with $310 billion in forgivable loans. That followed the initial infusion of $349 billion that was approved by Congress last month but ran out of money in less than two weeks.
“The reality is it’s going exactly where it was supposed to go, to very small businesses across the nation,” Moynihan said.
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