The following is a transcript of an interview with Bank of America CEO Brian Moynihan that aired Sunday, April 26, 2020, on "Face the Nation."
MARGARET BRENNAN: Welcome back to FACE THE NATION. We now go to the head of America's second-largest bank, Bank of America CEO Brian Moynihan. Good to have you with us again.
BANK OF AMERICA CEO BRIAN MOYNIHAN: It's good to be here, MARGARET. Good to see you again.
MARGARET BRENNAN: May 1 is Friday. That means a lot of bills are coming due for Americans, including mortgage payments. You- last time you were with us, you said customers can call and defer those payments. How long is that going to be sustainable for?
MOYNIHAN: Well, MARGARET, I think let's back up. It was five weeks or so when we were together and you have to think about themes that we were talking about then. Number one, there was only 3,000 cases in the United States, so think about the difference in numbers of cases. These social distancing and shutdowns weren't in place yet, but we knew they were coming. Importantly, we talked then about the need to win the health care battle, win the war against the virus. And it took all the people to do it. And what you've seen is our industry actually helped the way it was supposed to. And so whether it's through the regular way of lending we all did in the first quarter, which has $500 billion, including for us $70 billion and two billion in small businesses. Whether it's the work we did through the customer assistance program that you're referring to, the whole industry has adopted similar things. We have a million and a quarter customers, 1.25 million customers are asked- asked for a deferral of payments and that will continue to go on for the- for the near future and into the fall. And then on top of that, you know, we also have engaged in the government programs that you've been speaking about with various of your guests. Whether it's the PPP, which you have $300 billion went out, the program is only three weeks old. And another $300 billion is scheduled to go out. And we're ready to go on Monday. Or whether it's the checks that have been issued to people, which we are cashing for no fees at all our branches, even if the person is not a customer. And we're also helping those, our- our customers get the money in their account. And we're not charging any fees or anything. We're letting all the $1,200 go out to them. Or in the work we do in society writ large, which is to help our teammates be safe in our communities for a $100 million in charitable giving and our $350 million dollars of community development financial institutions.
MARGARET BRENNAN: Well, I- I want to ask specifically about the small business program you just mentioned. That money was really quickly depleted. There's a new round that Congress put together with the White House. It goes into effect as soon as tomorrow. When will Bank of America get that money out the door? And will small mom and pop shops have a- a better chance at getting some of that money than they did last time when some larger firms kind of jumped to the front of the line?
MOYNIHAN: Well, that- that money in our case, the first piece is pretty much all out the door, and it went largely to small businesses. If you think about the statistics of who we're going to put in to process next, 80 percent of businesses have less than 10 percent of- 10 employees total. 95 percent have less than 100 employees. These are small businesses. We have several hundred thousand to go in. And as long as a program continues to be funded, it will- all those people will get funded. The difference between this program and unemployment is if you qualify for this program, it's like getting unemployment authorization and then you have to win a footrace to the office. We need to take away the first-come, first-served aspect of this to make sure it's fully funded because at the end of day it's going to where people want it. Small businesses, 25 percent in our case, of businesses in low and moderate-income neighborhoods, businesses with a small number of employees. And we just have to finish the funding and finish the work. And we have thousands of teammates that have been working the last three weeks to help with our hundreds of thousands of applications.
MARGARET BRENNAN: Is that money already tapped out?
MOYNIHAN: Well the first batch is--
MARGARET BRENNAN: Right, the new--
MOYNIHAN: --some of it will be recycled into this--
MARGARET BRENNAN: It went in two weeks, the first batch, because of the demand.
MARGARET BRENNAN: Is the money that's been allocated this time- has- do you already have more applications than expected?
MOYNIHAN: Well, we don't. I mean our portion is roughly around $50 billion applications, and we'll push those through. Not all those get funded because some of them will draw and things like that. But I think, you know, there's great debate about how much this will ultimately take. But this is another healthy piece that we'll put to work. And I think it's clear that between Congress and the administration and the American people, we need to get all these funded and not make this a foot race. Just get the work done and get it very through. And the work has to be done in a way that is- supports American taxpayers who will ultimately pay for this and also gets the small business the money and gets the- and has them pay their employees, which is a goal of the program.
MARGARET BRENNAN: So when we spoke five weeks ago, as we mentioned, it was a different environment. Since that time, your analysts at Bank of America have changed some of their own projections. Now, the prediction is 16 to 20 million jobs could be cut in this country. The recession is going to be deeper and much more prolonged than initially expected. So those job cuts, if we're at around 16- 15 to 16 percent unemployment right now, which is what the White House says we're likely at, do you believe we are now at the peak of this?
MOYNIHAN: Well, I- I think there's two things to think about. First of all, the base assumptions for that five weeks ago changed pretty dramatically. There was sort of a low growth U.S., now it's a negative 6 percent in our case, our- our experts' estimates, and plus 6 percent in '21. But the key is to understand a quarterly flow of that. So it's a deeper reces- a deep recession environment in the second quarter, a less deep in the third quarter and then growth in the fourth quarter. So it's minus 30, minus nine, plus 30 on an annualized basis and then grows next year double digits and works its way down to single digits. So in effect, that's one thing to think about is this is a deep recession and then back out. There's great debate about how that works. But our estimates- our experts think it's late next year when the economy gets back to the same size it was prior to this. What we see in our consumer spending is kind of interesting, and it reflects this question of unemployment and cash flow in a household, because so far the spending by our consumers, if you took from January to- to- to this week, it's actually flat to last year. But obviously, it's a tale of two pieces of time. First, it was plus 10 and then it went down about 25 percent. And it's leveled off there. So the month of April is down about 20, 25 percent, but it's leveled off. And it's starting now to grow in certain areas, especially as you see it kind of hit bottom. So one of your earlier guests is in the entertainment business. That's still very far down. But other businesses are starting to come on. After the first round of provision buying, which was a flood of activity, you're now seeing that level out. That actually provides some hope that as the economy opens up in pieces, and safely, you'll see that consumer spending continue to grow, which will help fuel the U.S. economy. And so that's the second piece to keep aware of is first, the economic projections. But secondly, the cash flow and the stimulus PPP, the unemployment, the $1,200 EIP payments--
MARGARET BRENNAN: Yeah.
MOYNIHAN: --all those things are going in the economy and we're seeing- starting to see the effect of those.
MARGARET BRENNAN: All right. Brian Moynihan, thank you very much. We'll be back in a moment.
MOYNIHAN: Thank you, MARGARET.