You can follow Tony Nash on Twitter at and Dave Mayo through For more information about our company, please visit This week's QuickHit episode, we talked with Dave Mayo, an expert on banking, finance, and Fintech. We talked about how healthy the US banks are in this current #Coronavirus pandemic and if and how the new financial technologies can help streamline the process of providing services like loans to medium and small businesses.
Show notes:
TN: With everything going on in the wake of coronavirus, there's been a lot of talk about fiscal stimulus coming out of DC and stimulus through the Fed and other things. What is the health of the banking sector from your perspective? Because back in 2008 the banking sector was the worry, right? Is that the worry now?
DM: I think our banking industry is based on a level of faith. It always has been, right? Now that said, this is a completely different situation. Banks are very well-capitalized. Banks are not the cause of the problem. We don't have a systemic banking problem or issue. We're very, very healthy right now. When you talk about a stimulus being put into the economy, the more money flows in and out, the more people spend and buy and purchase, the better things are. That's just the way the banking industry is built.
TN: How do you see banking and FinTech really helping? How do you see, what you're doing, and banks generally really helping out there on the smaller and midsize level?
DM: There're the big banka and then we have community banks. Community bankers all across the country, they're the life of our banking system. They're the heartbeat.
So if you were to say "I want to use my mobile device" or "I want to use my online to do banking without having to actually drive to an institution," it's a faster connection point. And I think we're probably going to see a lot of that in these business loans the PPP loans through the stimulus plan.
TN: How do we actually execute that from the Treasury to the small business owner or to the individual that needs help? So, do you think that some of these FinTechs are kind of non-banks? Do you think some of these FinTechs will be able to do some of this stuff faster?
DM: A bank is a chartered institution and FI FinTech is a technology arm of that like online banking, mobile banking. A FinTech is something that looks like a bank, talks like a bank, but it doesn't have a charter. It's not really a bank. So they have to partner with an existing bank to charter.
TN: Are you seeing any data that's really talking about or raising your worries about the velocity of money about how quickly people are spending? Do you see us going back in to say a quasi-normal situation within the next two months or something?
DM: Predicting the time future I've never really been a big proponent of predicting the future. One way to measure things right now is to look at a mortgage note on a 15 or a 30. What is the spread between, what we would call in the old days, prime and what the asking rate on that loan is? So you're generally looking at above 3 percent.
There's a huge volume of it going on. And as long as we see that volume and people continue to go to the bank, cash their checks, direct deposit always helps.
But I think the one thing we want to keep an eye on is the volume of lending. Everyone in a situation like this is going to have a tendency to kind of climb up a little bit.
TN: Are there any specific indicators you're looking at on the commercial side to see if people are climbing up?
DM: I don't really see anything from that perspective. I don't think people are running out there right now at a time like this. You wouldn't want to run out and start a new construction project or something like that. Those are gonna have an impact. There's no way around it, but there again that's what stimulus is there to offset.
Right now, I would say we've got a very healthy banking existing. I think it'll be a little more spread out than a V-bottom and I think they'll probably be multiple cycles of this that go on to some degree.
But starting from a really healthy position in our banking system and in our economy, this will pass. And when it does, here's the thing I think is so interesting, unprecedented levels of stimulus and, the old saying you don't fight the Fed, right? So does the market go up and we have a stimulated economy? Of course it does. And with this level of pent-up demand and stimulus, will there be a bounce back? Yeah, there'll be a bounce back. The question is how huge will it be and how fast?
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