BofA Sees 500,000 Payment Deferrals, Surge in Loan Requests (3)

Half a million of Bank of America Corp.’s 66 million customers have deferred loan payments because of financial fallout from the coronavirus.

“The idea is to defer the payment, defer the impact,” Chief Executive Officer Brian Moynihan said in an interview Friday on CNBC. “We’re working with our customers who need help, who are losing their jobs. We have to preserve their ability to have cash flow.”

The lender is also dealing with a deluge of requests for funds from the government’s small-business relief program. By Friday evening, it had received 85,000 applications requesting $22 billion.

The Charlotte, North Carolina-based lender earlier said it was prioritizing 1 million of its existing small-business borrowers because they had already been vetted and could receive funds most quickly, Moynihan said.

That approach sparked criticism, including from Senator Marco Rubio, a Republican from Florida, who tweeted that the policy isn’t from the government but rather from Bank of America. “They should drop it,” he said.

The bank later said it would broaden its lending soon.

“In this first initial launch, we have focused on our full-relationship clients” comprised of current borrowers, Dean Athanasia, president of the bank’s consumer and small-business division, said in a memo to staff. “We are also highly focused on responding to the needs of our core small-business customers who do not currently have any borrowing relationship. We will expand our process soon and, in the meantime, are addressing these through an escalation process.”

President Donald Trump, meanwhile, tweeted Friday that a “great job” is being done by Bank of America and many community banks. “Small businesses appreciate your work!”

Read more: BofA prepares for deluge of small-business loan applications

Some banks, including Wells Fargo & Co., said they weren’t ready as lenders across the country grappled with a lack of detailed guidelines from the government. JPMorgan Chase & Co. started taking applications Friday afternoon after warning clients Thursday night it was still awaiting guidance and may not be ready the following day.

Separately, Moynihan said in the CNBC interview that only 5% of Bank of America’s trading employees are working from the company’s offices.

(Updates with loan application volume in third paragraph.)

To contact the reporter on this story:
Lananh Nguyen in New York at lnguyen35@bloomberg.net

To contact the editors responsible for this story:
Michael J. Moore at mmoore55@bloomberg.net

Dan Reichl

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