The current rush of COVID-19 vaccinations might not be enough to help the American economy fully recover this year. At least, that’s the opinion of a majority of bank executives, according to a new national survey conducted by IntraFi Network.
About two-thirds of respondents said they expect the economy won’t return to full capacity until 2022 or later. Their conclusions were undoubtedly swayed by personal experience: About 55% reported that the "economic conditions" affecting their bank had worsened from the previous year.
Bankers expect economy recovery to span another calendar year
Citing, in part, the strain on their own firm’s bottom line, bank chief executives and presidents don’t expect the U.S. economy to fully rebound this year. About 66% said recovery won’t occur until 2022 or later.
The U.S. economy will fully recover by …
- 43% — 2022
- 23% — Beyond 2022
- 19% — Fourth quarter of 2021
- 13% — Third quarter of 2021
- 2% — Second quarter of 2021
While the efficacy and distribution of the coronavirus vaccines has drawn some positive headlines, leaders in the banking industry also see headwinds.
For example, the vast majority of banks may not have a full, in-branch workforce for most of 2021. About 92% told IntraFi Network that they wouldn’t require employees to be vaccinated before returning to the workplace, with a separate, earlier survey showing that employees themselves are divided over mandated vaccinations.
Banks eye Washington’s new plans for the economy
Given the great challenge of warding off the pandemic, bankers across the country expect the newly-installed federal administration to focus its efforts on the Paycheck Protection Program (PPP), among other business-related measures:
The new administration will be most successful in implementing…
- 48% — PPP relief
- 16% — Legislation to help financial institutions assist marijuana-related businesses
- 13% — Housing finance reform changes
- 13% — Policy changes to the Community Reinvestment Act
In fact, the Biden administration has pushed Congress to buttress PPP. A new legislative proposal currently working its way toward the Senate would expand eligibility for PPP funds and increase the pot of funds as well.
Stimulus relief has been welcomed in other sectors. A previous survey of business executives warned that a lack of government intervention would hurt companies.
Financial institutions expect heightened consumer protections
While 57% of bankers expect the new administration to focus on coronavirus relief efforts, the industry’s leaders are also bracing for increasing consumer-protection measures. More than three in 10 predicted that consumer protection would be a top priority within the White House.
Many respondents viewed President Biden’s return to Washington, D.C., as reason to believe the Consumer Financial Protection Bureau (CFPB) will be newly empowered. The CFPB was established during the Obama administration, during which Biden was vice president.
Bankers had a mixed outlook on which issues the CFPB is likely to tackle first.
The CFPB will focus first on…
- 31% — Mortgage lending and servicing
- 20% — Data privacy
- 19% — Overdraft protections
- 19% — Debt collection
- 11% — Payday lending
Methodology: IntraFi Network surveyed 495 bank leaders (CEOs, presidents and CFOs) in January 2021.