The American Bankers Association is composed of all size banks and is the voice of the $18 trillion banking industry. Rob Nichols, president and CEO of the American Bankers Association, joins “Squawk Box” to discuss the federal payroll protection program that launched Friday and why so many banks struggled to pay out loans to small businesses around the country.
Howard Schultz said Monday he worries that many small restaurants and retailers may struggle to survive the coronavirus economic halt without additional help from the U.S. government.
“If we don’t provide a backstop for the restaurants, I suspect that we could see a situation around the country in which approximately 30% or more of small, independent retailers and/or restaurants never reopen,” the billionaire former Starbucks CEO said on CNBC’s “Squawk on the Street.”
Schultz said he hoped Congress and other public officials “are looking at ways to recognize that we must not only flatten the curve of the health crisis but we must begin to flatten the curve of economic despair.”
The value of these businesses extends far beyond their top-line revenues, he stressed. “It’s employment. It’s vendors. It’s all the people who support them, not to mention the intrinsic value of neighborhoods and community gathering.”
Congress created a $350 billion loan program for small businesses as part of a $2 trillion economic relief package meant to soften the blow from the COVID-19 pandemic.
The loan program, which went online Friday, has already seen a flurry of demand, adding to existing concerns that $350 billion wouldn’t be enough to assist all the business that need help. Portions of the loan used for payroll and certain other expenses can be forgiven.
reasury Secretary Steven Mnuchin has said he will ask Congress for additional funds if necessary.
Schultz suggested that future fiscal stimulus measures should include more of a “backstop” to help landlords and banks who want to “forego not only the rent in the short term but give an opportunity for these restaurant operators to open in a way in which rent is forgiven.”
“We can’t have a scorched earth situation in which 30 to 40% of restaurants and small businesses do not reopen,” said Schultz, a longtime Democrat who had considered an independent run for the presidency but decided against it. “It’s not a time for politics. It’s a time to band together to get hope to people who need it most; and most importantly to demonstrate shared humanity,” he said.
“We must come together and recognize that we’ll get through this, but we also have to dig deep to help those people who can’t help themselves.”