Nichols: Banking’s Role as Economic First Responder

In a wide-ranging interview with Upstart’s Leaders in Lending podcast this week, American Bankers Association President and CEO Rob Nichols shared ABA’s perspective on potential policy and regulatory changes, the economic landscape, financial technology and trends in banking and lending. Overall, the banking sector and economy are in a strong position, Nichols said, noting that there’s “a lot of alignment” between ABA and the White House’s primary economic policy goals.

“Increasing access to credit and helping with economic dislocation, those are the areas where we have a ton of alignment with the new administration,” Nichols said, noting that the association and its member banks, working with the regulatory community, Congress and the administration, are helping to spur the economic recovery. “All of those stakeholders realize that they need a fully efficient and effective, functioning banking system to do that,” Nichols said. “We want to be part of the recovery story, and they know that we need to be part of the recovery story.”

Nichols said ABA and banks were on the front lines of COVID relief. “Apart from all of the government programs rolled out last year, banks often were in advance of those, working with homeowners to keep people in their homes,” he said. “Pre-CARES Act and before PPP, banks were working with small business borrowers to see what they could do to keep small businesses afloat.”

Nichols added that the banking sector’s work with the government and the Paycheck Protection Program—despite the rockiness of the program’s launch—turned into a good example for how the government can work well with the private sector during times of crisis. PPP was “arguably the most effective part of the CARES Act by a mile,” he said, calling the nation’s 5,000 banks “economic first responders” and noting that roughly 4,000 of them were the ones dispensing funding to small businesses. “It was a heroic effort on the part of the government, banks and small business community.”