The American Bankers Association (ABA) not only foresees consumer and business credit markets doing well in the second quarter of 2021, it found that U.S. consumers are happy with the way their banks have performed during the Covid-19 crisis.
The ABA has an economic advisory committee that is composed of 15 chief economists from leading financial institutions across the nation that provides perspectives on regional and national banking and economic conditions, including quarterly reports and forecasts.
The advisory committee reported optimism for the second quarter of 2021 in view of there now being additional federal financial relief and accelerating vaccine distribution. It pointed to not only the recently enacted American Rescue Plan that extends many provisions of the original Covid-relief CARES Act but also to the government now allocating $10 billion for the vaccine rollout, industry-specific relief for restaurants, airlines, entertainment, the arts and other areas and more than $100 billion for schools along with $350 billion for state and local governments.
The committee also cited several other policies that are in place, including restrictions on evictions and foreclosures and the Paycheck Protection Program (PPP). The ABA saw vaccination efforts as the key to many businesses fully reopening and to millions of Americans returning to work.
The committee found that in December more than one-sixth of consumers reported that paying for usual household expenses was “very difficult.” It said that as of early March, nearly 35 million people continued to struggle to make ends meet.
A separate ABA study found that a year into the Covid-19 pandemic, U.S. consumers are happy with their banks and value the banking industry’s support throughout the pandemic.
The study was conducted by Morning Consult on behalf of the ABA. It included a national sample of 2,200 adults. The interviews were conducted online and the data were weighted to approximate a target sample of adults based on age, race or ethnicity, gender, educational attainment and region. Results from the survey had a margin of error of plus or minus 2 percentage points. The survey was conducted in early March.
The survey concluded that 86% of Americans with a bank account said they were “very satisfied” or “satisfied” with their primary bank and 96% rated their bank’s customer service as “excellent,” “very good” or “good.”
The survey found that 74% of adults approved of their bank’s response to Covid-19. The ABA noted that throughout the pandemic banks have processed more than 300 million government Economic Impact Payments and they delivered nearly $650 billion in Small Business Administration PPP loans.
“During a year of economic hardship for consumers and businesses, banks across the country have stepped up to support those affected by this unprecedented public health crisis,” said Rob Nichols, ABA’s president and CEO.
“These survey results reflect the countless hours employees at banks of all sizes have spent providing critical assistance to individual and business customers over the last year. Americans clearly appreciate the support our industry has provided during this challenging time.”
The study found that 34% of U.S. adults were aware of their bank’s programs to assist customers experiencing financial hardships, and one-third of that 34% have utilized at least one of those programs. The study reported that 72% who were aware of their bank’s assistance options during the pandemic now have a more favorable opinion of the financial institution.
The survey found that 84% of those responding said banks are important to the nation’s economy. About 40% of survey respondents who work at a small business said their company received a Small Business Administration PPP loan, and 92% of them said it made a difference for the business. In addition, 59% classified that difference for the business as being a major one. Eighty-nine percent of them said the PPP loan helped to preserve jobs at that business.
The survey asked how the bank customers received their own Economic Impact Payment from the government and 72% said it was as a direct deposit while 20% said they received checks and 8% received prepaid debit cards that were delivered by banks.
The ABA noted that U.S. banking is a $21.9 trillion industry employing more than 2 million people that has extended nearly $11 trillion in loans and is responsible for safeguarding $17 trillion in deposits.