American consumers are spending more freely as the economy opens up further, Bank of America CEO Brian Moynihan said Monday.
The volume of transactions on customers’ credit and debit cards as well as via the cell payment network has increased by 20% in 2021 compared to this point in time in 2019, Moynihan told CNBC’s Becky Quick in the “Squawk Box”. The comparison rules out 2020, an unusual year in many ways as the pandemic outbreak resulted in widespread home stay orders.
“People got a lot of stimulus money and they spent it,” said Moynihan. “The unemployment rate is falling and people are going back to work. People can go to amusement parks, they can take a trip to the US, they can go out to eat. You see that everything is open. “
When lawmakers passed President Joe Biden’s stimulus package in March, the total amount of coronavirus aid reached $ 5 trillion, a massive response to an unprecedented situation. This helped the country avoid the wave of borrower defaults on credit cards, mortgages, and auto loans that was expected at the start of the pandemic.
Almost all spending categories have rebounded, with the exception of travel, which is still 15% lower than it was in 2019, Moynihan said. Bank of America is the second largest US bank by wealth after JPMorgan Chase and has relationships with about half of American households.
Stimulus checks and increased unemployment benefits have pumped up customers’ checking accounts, Moynihan said. Accounts with an average balance of about $ 1,000 to $ 2,000 are “six to seven times higher than before the pandemic,” he said.
“You’re starting to spend some of that money,” said Moynihan. “The money is still there and they spend it when they have options.”
During the extensive interview, Moynihan said that his bank’s cybersecurity spending has grown from around $ 300 million a year when he started out as CEO to well over $ 1 billion a year.
He also said that 60,000 employees in the US have notified the bank of their vaccination status and are being invited back to office work, a process that will last until Labor Day.
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