The pandemic’s economic impacts have taken a toll on all businesses but in many ways, small- to medium-sized businesses (SMBs) have faced more harm than others.
While the tenacity and resilience of small businesses have been inspirational, their day-to-day experiences have varied widely, U.S. Rep. Patrick McHenry (R-North Carolina), ranking Republican on the House Financial Services Committee, told Karen Webster in a recent fireside chat as part of the B2B Payments 2021 PYMNTS TV series of programming.
“It's really a tale of two dramatically different situations,” McHenry said.
On one hand, certain businesses like restaurants and gyms are still contending with shutdowns and have a very tough path forward. But on the other side of the coin, other small businesses such as HVAC installers — have never experienced the strong demand that they're currently facing, he said.
Time For More PPP
When it comes to helping out those companies that are ailing, McHenry thinks a second round of targeted stimulus can emerge, despite Capitol Hill’s partisanship, given the broad-based support it enjoys in Congress.
“There is a belief on both sides of the aisle that the PPP [Paycheck Protection Program] is the most popular government program in existence — or that has existed in recent decades,” McHenry said.
To that end, he thinks it would make sense to replicate pieces of the original PPP that worked well. Among the bright spots McHenry would repeat include efforts that support the use of technology and the existing relationships that banks, credit unions and FinTechs have in the marketplace.
“So for the next round, I think we have to look at those very hard-hit industries that are perhaps not technology enabled, and those that we know are going to have a really distinct challenge going through the fall and into the spring of next year,” he said.
Other Ways To Rebuild Consumer Confidence
McHenry acknowledged that until a COVID-19 vaccine is approved it will be very hard to change public behavior, especially since research shows that consumers think it will be around another year until they feel fully comfortable coming again. For example, PYMNTS/PayPal’s latest How We Shop survey of more than 2,000 U.S. consumers found that as of September, they expected the pandemic to continue for about another 11 months.
But while McHenry said “testing, treatment, therapeutics and a vaccine” are the ultimate solutions, he believes there are other things that can be done in the meantime to jumpstart the process.
“Think about the airline industry, for instance,” McHenry said. “Would it give you confidence to know that everyone getting on a plane had been tested before they're able to get on the plane? I think so.”
He said such steps would not only get people moving about with greater confidence, but would also unlock international travel, which has declined by almost 70 percent.
Tech Bashing Is ‘Irksome’
While admittedly not an expert on antitrust law, McHenry is fully comfortable commenting on the overall state of policymaking, saying lawmakers need to be much more deeply engaged in the process.
“We need to make sure we've got smart policy outcomes, not dumb ones, but unfortunately too often, that's what we get,” he said.
To that point, he said the current focus on reining in Big Tech is an example of Washington “getting into a frenzy” because lawmakers on both sides feel beating up on these big companies is a political winner.
“How these [Big Tech] companies are enabling small business and helping small businesses get into the digital world has been fantastic. It's been amazing,” McHenry said before blasting the current antitrust probe.
“I think that’s problematic. I think it's kind of irksome,” he said.
As far as policy issues McHenry supports, the eight-term Republican said he favors legislation that would create a path for gig-workers to own a stake in the fast growing businesses for which they work.
McHenry also said he would like to see an update to the country’s landmark consumer financial privacy law, known as the Gramm Leach Bliley Act.
“[GLB] was set in the late nineties and we've lived under it for over 20 years and it is more onerous, and more restrictive than HIPAA is on our health records,” he said, expressing his desire to reform the legislation to protect consumers' data, and ensure they are informed about data rights.
The Lessons Of Resilience
In summarizing his thoughts on what has been an unprecedented year of pandemic related turmoil, McHenry said three key areas stood out to him: resiliency, technology and governmental systems working.
“I think the resiliency of people is one of the key components here,” he said. “We went from one of the best economies of our lifetimes in February to a complete lockdown across most states.”
While praising citizens for battening down the hatches and making the tough decisions that were needed, McHenry was also impressed by the federal response to the pandemic.
“When the stakes were the highest back in March, and we just didn't know the magnitude of the crisis, our governmental agencies and our systems actually worked.”