The chairman of the Federal Deposit Insurance Corporation saids so far, banks have weathered the economic crisis brought on by the COVID-19 pandemic.
Jelena McWilliams held a “virtual” meeting with North Dakota and South Dakota bankers today Tuesday. In an interview with Prairie Public, she said this economic downturn is much different from the recession in 2008, because the loans have been on more solid footing, and the banks are well-capitalized.
"We've been monitoring banks, especially those that have a heavye exposure in industries that have been particularly impacted by the pandemic -- those in the oil and gas sector, and those in farming and hospitality and tourism sectors," McWilliams said. "So far, they have been able to withstand the shock."
McWilliams said those banks are working with their borrowers, to modify loans, if necessary.
"They're very proatcive in engaging," McWilliams said. "I think that has helped."
McWilliams saids early on in the pandemic, as businesses closed and people self-quarantined, some people were pulling their deposits out of the banks. She said FDIC launched a series of public service announcemetns, asssuring depositors that banks are safe.
"You do not need to pull your money out of the bank because you are concerned about the stability of the banks," McWiliams said. "Even if a bank fails, the FDIC stands behind those insured deposits, and we will pay you out."
As for the Paycheck Protection Program, McWilliams said the banks have handled those loans very well, and they’re backed up by the federal Small Business Administration.
McWilliams has a state goal to visit bankers' associations in all 50 states. She said the pandemic meant talking to bankers in the Dakotas virtually. But she said she still has that goal, to visit the states in-person.