Its prediction that business conditions will remain weak this year — and into next year — stands in stark contrast to forecasts from political leaders that the economy will rebound quickly from the coronavirus pandemic.
Though hopeful for a second-half bounceback in the economy, JPMorgan Chase is prepared for 20% unemployment, lackluster GDP and losses in its loan portfolio that could reach tens of billions of dollars.
Republicans balked at measures like an overdraft fee ban and interest rate cap in the recent stimulus bill, but Sen. Sherrod Brown, D-Ohio, isn’t done trying to add such proposals to future relief packages.
By helping borrowers now, banks hope customers can quickly catch up on payments once the coronavirus pandemic ends. If they can’t, interest income will remain low and charge-offs could pile up if the crisis drags on.
In blue states in particular, governors and attorneys general are taking up the mantle of consumer protection during the coronavirus emergency, effectively adding another layer of regulation to the patchwork of state and federal oversight.
The $5.9 billion-asset Liberty Bank in Middletown had set aside $5 million to make small-dollar loans to customers affected by the coronavirus pandemic.
If Capitol Hill plans another round of stimulus, Democrats could have more leverage to demand steps such as suspending overdraft fees or placing a temporary cap on consumer lending rates.
CEO Brian Moynihan also said in an interview that the bank is helping clients affected by the coronavirus pandemic through increased commercial lending to companies and expanded forbearance for Main Street customers.
