The following is a transcript of an interview with Bank of America CEO Brian Moynihan, which aired Sunday, June 6, 2021 on “Face the Nation”.
JOHN DICKERSON: Now let’s move on to the state of our economy with Bank of America President and CEO Brian Moynihan. Hello.
PRESIDENT AND CEO OF BANK OF AMERICA BRIAN MOYNIHAN: Hello, JOHN. How are you?
JOHN DICKERSON: I want to start – great, thank you. I want to start with the question of cyber attacks. There have been a lot of them recently, and we’ve seen how these ransomware attacks can affect the economy. How much time do you spend on this and has your approach become – have the stakes increased based on these new recent attacks?
MOYNIHAN: Well, the financial services industry has been a problem for many years, and so I … I spent time in it. But frankly, the good news is that we have a great team and our annual spend has gone from maybe four or five hundred million dollars a year when I became CEO a little over ten years ago to a billion. of dollars a year, more than 2,000 people work on it. We work closely with other institutions in our industry. But there is more that can be done and there are suggestions and proposals coming out to do more information sharing, cooperation, speed and – and things like that, which I think needs to be looked at. by the administration and Congress and pushed through to protect more people.
JOHN DICKERSON: Tell me a little bit about that. Speed in particular strikes me as crucial in one of these cases. What more needs to be done?
MOYNIHAN: We were able to create a group called the ARC. Now it used to be called FSARC, but it’s a bunch of many companies that – that are inside – the tent, so to speak, sharing information with people who have the necessary permissions. And it allows us to act quickly when a person sees something and share it with others. And I think this kind of cooperation is for the most critical industries, but needs to keep shifting to more and more industries over time.
JOHN DICKERSON: Now on to the health of the economy. The May Jobs Report was good, but not great. What do you see? You have a special window on people’s spending, their consumption habits and their economic activity. What do you see from your point of view?
MOYNIHAN: Well, a few key points on the economy. One is that it is expected to grow, the US economy is expected to grow 7% this year and 5.5% next year by our team. If you think about it, the economy is now as large as it was before the pandemic, and is expected to grow at a rate two to three times the rate over the next two years. Our consumers have a lot of money in their checking accounts. We think they’ve spent about 65 years or they haven’t spent about 65-70% of the last two stimulus rounds. Loans are starting to increase and borrowing capacity is plentiful. Companies have unused lines. And our consumer spending, which stands at a trillion and four so far this year, is up 20% from 19 and obviously a lot from 20. And what that really tells you is is you see a growth rate of 10%, which is a faster growth rate over a larger amount. So the US economy is really on the verge of coming with some key risks. One is the supply chain, the dynamic that I’m sure you talked about on your show. And the other is the people who get the workers. And that bodes well for the unemployment figure, which is starting to drop. And we expect to hit the low to the mid-4s by the end of the year, which is a pretty strong recovery engineered by work on the fiscal side, the currency side and, frankly, private industry.
JOHN DICKERSON: When you focus on that 20% of 19, as you mentioned, 19 was not a pandemic year. So the spending seems to be – one of the things we saw during the pandemic was people were paying off their credit cards, saving money. So do you attribute that 20% basically to what some people call revenge spending or the kind of pent-up consumer demand that was out there?
MOYNIHAN: I think a lot of it has to do with – and what you see happening is really reopening on all levels and – and so, whereas in some places because the infection rates were different and reopened faster, you have a nice universal app now. So even here in Massachusetts where I live, you see people being able to move. So you see spending shifting to domestic travel, spending increasing dramatically. Car rentals, hotels for leisure travel, not yet business travel, which will likely be late this fall, are strong. Theme park reservations and things like that. These are all very good signs. And by the way, we are moving from buying food in the store to more people going to sit down restaurants, even quick service restaurants. So you see this natural behavior, that I can go out, I can do things, and I can sit down and have dinner. Because, frankly, it’s been a long time since I first spoke to MARGARET on this issue, it’s a war on a virus and America is starting to win thanks to all the great vaccination work that is going on. We are starting to win the war and it is not over. We have to be careful to do it. But we are starting to win the war and it allows the economy to reopen and it allows the spending to take place.
JOHN DICKERSON: Let me ask you a question about small business. Bank of America is the largest small business lender. More than 400,000 closed during the pandemic. What do you see on the small business side and what types of businesses are borrowing and starting to take risks again?
MOYNIHAN: Well, the – the good news is you start to see our – our smaller companies, which is companies up to five million in revenue, we see that the creations are actually going beyond what they were in 2019. for the month of May. They are up a bit in April. They are basically flat in March. So you see it coming. And this is really the reopening in these economies. The companies that do the best are the service companies like doctors, lawyers and things like that get well quickly. But now we’ve seen the supply chain, the industry suppliers, et cetera, grow faster. One of the things we need to work on is to continue the supply chain. And I think that’s when we asked our little business, what do you think of fall, it was all about the pandemic. In the spring survey we’re doing, which involves millions of businesses we’ve asked the question, it’s about getting workers and getting supplies so they have things to sell and buy. manufacture for sale to their customers. And this is something that is straightening out but that will take a little time.
JOHN DICKERSON: And are you concerned about the backlog of people paying their mortgages? Those who couldn’t during the pandemic, what happens when they lose government aid? Will they be able to pay off those mortgages?
MOYNIHAN: Well, the good news at Bank of America is really a thing of the past. At the climax, we had given customers, two million customers, the right not to pay. We’re only a fraction of that now and it’s going through the system. So I think at – the same in all mortgages you go down. So I think there’s a little part of the world that’s largely recovered, but there’s – there’s pockets of things that just need to be dealt with. And I’m sure companies will treat them fairly.
JOHN DICKERSON: All right. We’re out of time. Thank you very much, Brian Moynihan, for being with us. And we will be back right away.