WASHINGTON — Banks so far have been able to avoid much pain from the pandemic, but the decision by the Trump administration and congressional leaders to put coronavirus relief negotiations on the back burner is making some in the industry nervous.
The economic recovery has shown encouraging signs since widespread business closures and stay-at-home orders this past spring depressed revenues and led to a historic rise in unemployment.
But some of that turnaround may be attributed to the massive stimulus package Congress enacted in March. With relief coffers running dry, coronavirus cases still rising in many parts of the country without an available vaccine, and regional restrictions on business reopenings still in place, bankers are beginning to worry about the government shifting its priorities.
“The underlying economy in Main Street across America, I think, remains relatively strong. The million-dollar question is how long … restrictions on businesses and gatherings, how long it goes on,” said Noah Wilcox, chairman of the Independent Community Bankers of America and CEO of the $278 million-asset Grand Rapids State Bank in Grand Rapids, Minn.
President Trump tweeted on Oct. 6 that he was rejecting a $2.4 trillion stimulus plan offered by House Democrats and was encouraging Senate Majority Leader Mitch McConnell, R-Ky., to focus instead on confirming Judge Amy Coney Barrett to the Supreme Court.
For his part, McConnell said Tuesday that the Senate would vote on a targeted aid plan later this month, which is much less ambitious than the aid package supported by Democrats. The Republican plan would amount to roughly $500 billion in aid, including additional funds for Paycheck Protection Program. But House Speaker Nancy Pelosi, D-Calif., has already rejected a $1.8 trillion stimulus proposal from the White House.
“When the full Senate returns on Oct. 19, our first order of business will be voting again on targeted relief for American workers, including new funding for the PPP,” McConnell said Tuesday. “Unless Democrats block this aid for workers, we will have time to pass it before we proceed as planned to the pending Supreme Court nomination.”
Bankers say that it is imperative that the White House and lawmakers get back to the negotiating table to approve additional economic stimulus as the pandemic continues to keep people out of work. Some in the industry want more federal aid available for businesses to maintain employment, similiar to the objective of the PPP.
“Every metric I look at says the sky is sunny and clear. But I don’t believe that that’s necessarily sustainable,”…
Read More: Stalled stimulus talks put bankers on edge