WHEN: Today, Friday, April 3, 2020
WHERE: CNBC’s “Squawk on the Street“
The following is the unofficial transcript of a CNBC interview with Bank of America CEO Brian Moynihan and CNBC’s Jim Cramer on CNBC’s “Squawk on the Street” (M-F 9AM – 11AM) today, Friday, April 3rd. The following is a link to video of the interview on CNBC.com: https://www.cnbc.com/video/2020/04/03/bofa-ceo-brian-moynihan-on-the-banks-response-to-coronavirus.html.
All references must be sourced to CNBC.
JIM CRAMER: Alright, why don’t we bring in Bank of America CEO Brian Moynihan now? Brian, wow, we’re talking to you a lot because you are, you’re at the epicenter, your bank is at the epicenter of trying to get America moving again. Could you tell us whether there are already thousands of people going to Bank of America and saying, Listen, ‘I want some of that act, I want that grant, I want that loan’? Where are we as of this morning?
BRIAN MOYNIHAN: Well, Jim, thank you for allowing me to join you again. Just first off, we have got to remember, this law was not enacted until late in the afternoon last Friday. So, a week later, through the hard work of Treasury and all the people there working on this, the hard-working industry, we are now taking applications and we’re about 10,000 applications this morning. And my colleagues across the industry had a call this morning. We’re setting up to take the applications. I think it’s a testimony to the speed at which we can move. So, speed is of the essence for small businesses. The PPP is meant to keep their payroll consistent. Going against some of the discussion you were just having on jobs and other impacts in the economy, which we expect to see in April. And you’re seeing the money will start to go out the door once the applications are processed over the next short period of time.
JIM CRAMER: Brian, we’ve got a common enemy in COVID-19. And I’m wondering if I went to my bank right now, to my Bank of America branch, and I’m a client, would I find someone? Because you’ve had to put people in different places just so that they don’t get sick. I know how much you care about your associates and employees. Are there enough people at the bank that I could go in and say, ‘Listen, this — I want to obtain a paycheck protection program, how do I do it?’
BRIAN MOYNIHAN: Sure. There are teammates, our branches are open. We’ve kept them consistently open because we’re one of the essential industries. Our teammates are being safe in those branches. We’re taking great care to make sure they get the social distancing and the cleaning and everything they do. But they’re open every day. Just to give an example, I think on Monday or Tuesday this week, you were seeing $700 million in cash – $6-700 million in cash – go out over the tele-line and through the ATM. So, they’re open and functioning. Our teammates there are ready to serve. But most importantly, though, the nice thing is the team worked all night last night to get a digital app up. And so, this program can be done completely digital. And right now, we’re focused on our borrowing clients. And we want, as the Treasury Secretary has said and as the industry has said, we want everybody to go to their borrowing bank. Because that will be easier to process and be able to process faster. There are certain customers out there that will be eligible for the program that don’t borrow. We’ll process them also. But first, we have to focus on the borrowing clients to make sure we can take care of them. That’s a core relationship bank if you think of the 4,000 banks in America and all the clients that are eligible for this, if they go back to their relationship bank, it will be easier to get them through the process faster. And then secondly the people with the core relationship that don’t borrow, we’ll handle them also.
JIM CRAMER: I think it’s important to point out, your app is the most popular of all the bank’s apps. That’s unbelievable it’s already up. And it’s not just a millennial app. I think there’s a huge number of people who use it. How simple is that? Is that just the–does it explain everything? You know, Brian, I had to hire someone to understand exactly what I could get for my businesses. Is the app more – is it explicit?
BRIAN MOYNIHAN: Yeah. You — well, the core banking app, we stood up a new piece, obviously, because this is a new program. Literally, it is less than a week old. Regulation just came out late last night. So, the team has done a spectacular. It explains the process. It takes the application. We’re trying to make sure it’s fully operational behind the scenes. And you know, that takes a little more work. We’re continuing to work on it. But if a customer goes in, they can find the app and our business customers can go onto their, what we call cash pro, which is their online app and they can see a button and press on it and get to the application period. It is within the broad Bankofamerica.com. And so the people on the mobile apps and stuff have other access.
JIM CRAMER: Brian, where are we right now? When do you think we’ll be open for business? You’ve got — you’re in touch with more businesses and individuals than pretty much anyone in the country. And I know you and are both concerned that the enemy that is COVID-19 has us on the run right now. When do you think we’ll get it on the run?
BRIAN MOYNIHAN: Well, I think, as we saw in the month of March and you’re talking about it, the impact to all the types of businesses–restaurants and the hairdressers and doctors who are not involved in this — directly in the fight here, shutting down their offices. The orders by 90-95% of the population. March was really different each week. From the beginning of March to the end of March, the amount of money that flowed through the company by our consumers went from around $60 billion a week to $mid-40 billion a week and that can bounce around depending on the week runs and where it is in the monthly cycle. But you saw it slow down. The real question is how fast can we get those parts of the economy restarted? And that’s going to come by getting comfort about the testing and understanding the disease, all the things you were talking about earlier. That is still ahead of us. Obviously, the president issued an order that went through the end of April. I think it’s going to be a while. Right now, the economy seems to be settling into a level that we’ll have to judge that we — we can start to see emerge. We don’t know when it will be yet and we’ll keep you posted over the next few weeks. But to get the rest of 20 billion a week of payments, you’re going to need to see activities open up again. And that means winning the war on the virus.
JIM CRAMER: Brian, what do we see to the prospect of — get to the point where the country is losing too many jobs and politicians say, you know what, it’s time for mortgage forbearance, where we don’t have to pay our mortgage, it’s time for rent forbearance. What happens? Because there are contracts in our country that made it such where it’s easy to get a mortgage, because mortgages are sacrosanct and ironclad. You have to pay. Student loans. What happens if people in Washington say you know what, Brian? You’re not allowed to — tell your servicers they can’t get that money this month. Sorry. What happens to Bank of America?
BRIAN MOYNIHAN: Well, look, right now we’ve helped nearly a half a million customers defer their payments. And what we mean by that is for our mortgage customers, if you have your mortgage with us, we just tack it on the end. So, if it’s 28 years left on your mortgage, somewhere out there, 28 years from now if you don’t move, you don’t pay off your mortgage, or something like that doesn’t go on, you’ll have to make up the three payments that you made up in the summer here. So, I think the idea is to defer the payment, defer the impact. But the real key of the CARES Act and this PPP and the different provisions and the unemployment provisions and even the cash provisions is to keep money in the hands of people so they can live – a) maintain themselves in the broadest context in terms of living, but also continue to pay their bills. The other question is I think incumbent upon employers like us, is keep the people employed, keep paying them, they should be able to pay their bills. And I think We have to remember even though I gave you a half million, we have 66 million customers. So, there are a lot of customers who will be able to pay their bills and even in our mortgage, 30,000 customers or so, requested relief out of the hundreds of thousands we have. So, you’re not going to see — a lot of people are getting paid, you saw that service to the economy. They’re still working, and they should pay their bills would be my advice to the people, not only to a policy question but also the fiscal management question. So, we’re working with people who are losing their jobs. We have to preserve the ability to have cash flow. And that’s what the CARES Act did. That’s what the PPP does. And we’re doing our best to help.
JIM CRAMER: Let’s say I have a small business and I say this you know what? This Bank of America is a pretty good bank. I’m going to set up an account and get my money through them. Are you ready to do that? Some say that it’s really for existing Bank of America accounts. You can’t go in there, open an account today and get things done.
BRIAN MOYNIHAN: Yep, we are prioritizing. We have a million borrowing customers we’re trying to get through the system first. Then our second priority will be the customers who have the core operating account with us but don’t borrow anywhere. For those that borrow from the other 4,000 banks in the country, we’re trying to get them to go back to their bank, which is the priority the treasury put on it. Because a) the process is faster and b) you know, it spreads the work out and the obligation and will make the whole system go faster. If everybody shows up at bank a, b, or c, that means it’s going to slow down the process. So my advice to customers is, if you borrow from us, you can apply on the application. If you have your relationship with us, but don’t borrow, the relationship managers will handle that. But, if you borrow with another bank, and when I talk with my colleagues in the industry, they’re all the same, please, go back and work with them. Because they’re your core bank and they know you the best and can process you the fastest.
JIM CRAMER: Alright. Brian. last question. We’re all trying to get united and we feel the same. We actually know people at this point who have died from it. I have lots of friends who know people who have died from it. Bank of America has been unique in the amount of charity that you’ve done, in the amount of money that you devoted, and the fact that you’re keeping people on the job. Just speak to what you — you’re a very humble man. I’m going to put you on the spot. I know you don’t like to do this. Speak to some of the stuff you’re doing. Because I think people have to know, business is the greatest source of change in this country.
BRIAN MOYNIHAN: Well, I think number one, you mentioned earlier, we’ve come at this on a customer-centric and a team-centric view. We’re trying to do everything we can to take care of, limit the number of teammates we have that have the disease or a family member has the disease and make sure they’re getting the best medical help. We continue to work, have like in our trading operations, only 5% of the people in the trading operations are actually at work. 95% of people trading from home. The team has done a fantastic job of deploying over 150,000 work from home positions. So, we’re complying with the social separation. But if you think more broadly, we did $100 million of charitable giving. We’re implementing that through our 92-market presence. We’ve maintained our employment. We already announced that, as of last month, we went to 20 an hour minimum wage for everyone in our company. 401k contributions. We’ve waived the testing costs. We’ve waived things like that to help our employees. Child care, $100 plus a day for you to hire your cousin if they’re out of work to take care of your children so you can work for us. Then on top of that, one thing I’m proud of is the team came to the decision yesterday, a few days ago that we told all our summer kids, you have a job, which I think is 1800 or 1600 of them. And we told our permanent kids, you have a job, no worries. How we’re going to put them to work will be interesting, if we’re still in a virtual condition. But that’s 3,000 kids that will be taken care of coming out of schools. And we’re proud of that.
JIM CRAMER: Well, that’s great to hear. I know a lot of kids coming out of school this year have no concept their jobs have been taken away. And all the things you’re doing are terrific. Best of look in trying to get all those applications finished. I know that’s what you want to do. And thank you for taking the pledge to not lay off people. Brian Moynihan, the Chairman and CEO of Bank of America. Always good to talk to you, sir.
BRIAN MOYNIHAN: Thank you, Jim.
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