Texas Economic Resilience Summit focuses on critical role of banks in economic recovery
A prominent line-up of state and national lawmakers, regulators, business leaders and economists presented at TBA’s two-day Texas Economic Resilience Summit, delivered virtually Sept. 23-24. The program was created to explore the critical relationships banks have with every sector of the Texas economy and to discuss the kinds of policies necessary for Texas to lead the economy out of the COVID-19 pandemic.
Day 1 of the program, which was kicked off by Gov. Greg Abbott, featured Acting U.S. Comptroller of the Currency Brian Brooks, Lt. Gov. Dan Patrick, Texas Speaker of the House Dennis Bonnen and Commissioner Charles Cooper of the Texas Department of Banking.
Day 2’s presenters included Robert Kaplan, president and CEO of the Federal Reserve Bank of Dallas; Larry Kudlow, assistant to the president and director, National Economic Council; Charles Schwab, chairman of the Charles Schwab Corp.; Commissioner Caroline Jones of the Texas Department of Savings and Mortgage Lending; and U.S. Sens. John Cornyn and Ted Cruz.
“Texas is strong and our people are resilient,” said Gov. Abbott. “With your help, we will bring the Texas economy roaring back stronger than ever.”
Abbott thanked the nearly 350 participating bankers and business leaders for their “tireless efforts to support your communities as well as the small business owners that serve as the backbone of the Texas economy.” He recognized the leading role Texas banks played in processing more than 400,000 Paycheck Protection Program small business loans to save jobs in the Lone Star State.
In a virtual fireside chat with TBA President and CEO Chris Furlow, Commissioner Cooper discussed the performance of banks during the pandemic. He said that with incomplete federal guidance, Texas banks in good faith helped to make the majority of over $41 billion in PPP loans.
“That is an amazing feat,” Cooper said. “The $41 billion protects about 4,250,000 jobs.”
Speaker of the House Bonnen and a panel of bankers discussed the critical role community banks play in the Texas economy and the speed with which the industry provided support during the pandemic. The bankers, including Sam Susser, chairman of the board of Affiliated Bank; Wes Hoskins, chairman and CEO of First Community Bank; and Mike Mauldin, director of the Texas Tech Excellence in Banking Program, pointed to the Paycheck Protection Program and the long hours bankers spent to help keep small and mid-size businesses afloat.
Acting Comptroller Brooks said that officials often view banks and the economy separately. He disputed that view and called banks “the infrastructure of the economy.” He focused comments on the importance of bank innovations in the post-COVID environment.
Schwab, who serves as the chairman of Charles Schwab Bank, SSB and Charles Schwab Premier Bank, SSB, explained why these banks moved their charters to the Lone Star State. “Optimism is fundamental in our company and I’ve found that to be true in all my business in Texas.” The Schwab brand will eventually employ approximately 6,000 employees in Westlake.
In a discussion on the national economy pre-and post-COVID-19, Kudlow was interviewed by Donald Luskin, chief investment officer for Dallas-based TrendMacro.
Even as a volatile political environment contributes to uncertainty, Kudlow said the nation is seeing solid recovery signs — positive numbers in housing, retail, automobile sales, manufacturing and unemployment. The V-shaped recovery, Kudlow said, is “self-sustaining and will carry us to better than 20% growth in the third and fourth quarters.”
Kudlow said the Texas economy is in far better shape than other states. “Texas will come out of this pandemic as strong as ever — maybe even stronger — thanks to its pro-business and pro-entrepreneurial attitude,” that he added is “attracting people from all over the country.”
Kaplan gave an update on the U.S. economy, pointing out that it is the Dallas Fed’s view that the U.S. economy will grow at a rate of 30% annualized in the third quarter, which is a “big rebound,” and will experience healthy growth in the fourth quarter.
He predicts the economy will end 2020 with around 7.5% unemployment rate, and the economy will experience above trend growth — above 3% — in 2021. “When you put all that together, we’re recovering,” he said.
He also addressed the need to keep the Fed funds rate at zero until the nation weathers the pandemic. He credits the economic rebound in part to the Paycheck Protection Program and the rapid implementation of unemployment benefits that helped many impacted families keep spending.
Sens. Cornyn and Cruz also addressed the economy during the pandemic, with Cornyn pointing out that Texas still boasts one of the best economies in the world due, in part, to policies that make Texas one of the most business-friendly economies in the world.
Cruz said the No. 1 priority of Congress needs to be reopening the economy and helping people get back to work. That’s why he introduced the Recovery Act, which, he said, would reduce taxes, repeal regulations, expand COVID-19 testing, deliver tax relief to employers and employees, bring supply chains back to the U.S. and eliminate burdensome regulations that hurt small businesses.
Texas Comptroller of Public Accounts Glenn Hegar said the state was able to better weather the pandemic storm than other states thanks to a healthy pre-COVID economy. The key, he said, to growing the Texas economy in the right direction is to instill confidence in consumers that the state is balancing health and safety needs with economic needs.