Fox News Channel’s Sunday Morning Futures anchor Maria Bartiromo interviews Bank Of America Chairman and CEO Brian Moynihan, discussing BofA cutting ties with businesses operating migrant detention centers.
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MARIA BARTIROMO, FOX NEWS CHANNEL’S SUNDAY MORNING FUTURES ANCHOR: Welcome back. We have talked often on this program about the crisis at the southern border. We heard from lawmakers and policy-makers all morning, but the issue is also working its way into the private sector. Bank of America announced last month that it will no longer be doing business with companies that operate migrant detention centers and private prisons, the decision coming amid a public outcry over conditions at several border facilities. Brian Moynihan is the chairman and CEO of Bank of America. And he joins me right now. And, Brian, it's great to see you.
BRIAN MOYNIHAN, CEO, BANK OF AMERICA: Good to -- good to be here.
BARTIROMO: Thanks so much for joining us. I want to talk about your earnings, which were very good last week, and what it showed about the economy. But what was behind that decision to exit ties of those companies working with detention centers?
MOYNIHAN: Well, to focus on the decision first, I think you have to think about how we make this. We have a group that -- of senior business people that think about the decision. We make it reluctantly. But we really drive it based on what our teammates tell us. And so we had teammates, because of their backgrounds and their thoughts, that were very upset about the broader issues of prison reform and sentencing reform, some of which went through in the last few weeks on a bipartisan basis, and the border. And they basically said that we need -- we should make a statement here. And it rolled through the system. We made it. Now, the thing I would focus people on -- and you heard some of it in your early dialogue -- is, we need to get immigration right. We need people in this country. We're not creating people fast enough. The population is growing at about half the rate it was before the -- before the financial crisis. And so we will grow faster if we have more people. And so it's got to be organized and efficient. It's got to be well-documented and everything. And that's -- that's the crisis we're facing is, we're -- just when we need more people, we're in a crisis of trying to figure out how to do it. And if you go back 20 years ago or so, there was immigration reform, bipartisan basis. At some point, we got to make that happen.
BARTIROMO: Yes, I mean, especially since we know that this country lets in a million people on a legal basis. They get their green cards. They get their citizenship. But now we're facing a million illegals.
MOYNIHAN: Yes. It's -- to get it all right is difficult, but it's needed, because, at the end of day, we need lots of people, because we have the greatest country and people want to come here to work.
BARTIROMO: Let me ask you about working and the broader economy. Net income of $7.3 billion, you reported just last week. What could you say about the economy right now? Characterize things for us.
MOYNIHAN: Well, if you look at what we think, we think the United States ought to grow 2.4 percent GDP growth this year. And if you look at the world, we think it's in the low 3's. Both of those have come down a little bit from '18 to '19's predicted outcome, which last year was 3 percent. So you expect it to tip down. But it's not going south. It's not a recession. It's just a slowing down of a growth rate that is faster than most the years in the last decade or so. And so we have got to keep in perspective what's going on. As we look and what we see in our customer base, the consumers are spending money at a rate of about 5.5 percent for the first half of the year vs. last year. That's a trillion, trillion-and-a-half dollars of Bank of America customer spending, up 5.5. percent, up 8.5 percent last year, and up about 5 percent the year before. So it's more consistent with a 2 to 2.5 percent growth. That is very good news for the economy.
BARTIROMO: It feels like things are really strong. You have got unemployment at a 51-year low. You just had growth of 3.1 percent in the first quarter. And yet the Federal Reserve is going to lower interest rates in two weeks. Do you think the Fed cuts rates?
MOYNIHAN: The market says they do. I thought that they wouldn't because the data was so strong.
MOYNIHAN: I'm going against city hall, so to speak, right now. But I think what they're thinking about is -- and Jay Powell was clear about it, Chair Powell, about the external factors, as opposed to the U.S. itself. The U.S. is fine. The U.S. is relatively strong. The fundamentals are right. It's outside the United States and then the reverberation of that impact back to United States. And so we will see what they do. But people ought to understand they're doing it. And we're -- for that reason, as they have said. And the reality is, the U.S. economy is fine.
BARTIROMO: Because I know that Europeans are stimulating, Asians are stimulating. So when you have got other central banks around the world cutting interest rates, the Fed feels that it needs to cut rates, even though the backdrop is quite strong, as you just said.
MOYNIHAN: Well, when you're the largest economy by about a third of any economy, if your economy is growing, that's good for the rest of the world because of the consumption nature, the consumers and the drivers of our economy, the entrepreneurship and things. So, the fear, if the United States slows down, the rest of the world has a hard time making it without them. And so I think that's what's on the Fed's minds.
But let's back up. Underneath it, you see the U.S. growing. And you see it for the right reasons, the unemployment lowest, like you said, going back to 51 years. When we're all about the landing on the moon, well, that's when it was.
BARTIROMO: Exactly. Yes.
MOYNIHAN: And so twice as many people working as were working in our country in 1969, twice as many, plus.
BARTIROMO: That's incredible.
MOYNIHAN: And that shows the entrepreneurship of the United States and the capitalism and how it works driving twice as many workers across 50 years. The population only went up by 100 million, and the workers went up by 80.
BARTIROMO: Tell me about -- right now about housing. I was just referring to you when I was talking with Ben Carson, because black homeownership is at an all-time low, and yet Hispanic homeownership is soaring. What can you tell us about housing, as the largest mortgage originator?
MOYNIHAN: So, if you -- well, if you back -- you back into the broader context, we did about twice as many mortgage loans this year, second quarter, vs. last year, which means the demand is out there. As we look at it, we see this issue about helping people in homeownership. So we announced a few months ago a $5 billion program, low down payment. We're a prime lender. We're trying to be very conservative, because that's how we run the company.
And so we -- but that $5 billion program is to help the types of issues we're talking about, which is, the constraints are largely ability to accumulate the down payment of 20 percent, which is a standard program, and the constraints on sort of availability.
And both those, we got to solve. Frankly, availability is also good for the economy. In other words, there's a million housing units being built so much. The households are forming about a million. There's a lot of, I think, fundamental good run left in housing in our economy.
BARTIROMO: So mortgage rates had dropped quite a bit. Did that help the market? Did people come in when they saw rates going lower?
MOYNIHAN: Yes, we saw about twice as much, as I said. And -- but we also saw the highest purchase content, which is a little bit Bank of America-specific ,that our team is doing a great job there. But Steve Boland, who runs this area for us, is heavily focused on homeownership for all groups in society. And I think it's something we need to continue to work on.
BARTIROMO: You have been a leader in technology at BofA. I know that. Real quick -- we have got just a couple of seconds left here -- digital money, how do things change in the future?
MOYNIHAN: Well, we have about $5 billion we spend to move cash and coin and currency and checks around our company. So we're trying to digitize that activity. And you're seeing the volumes rise. Our Zelle volumes in the second quarter were up dramatically, 100 percent almost year over year, about eight million Zelle values sending P2P payments to people. All that's going on, except there's still a half-billion dollars of cash go out of the ATMs and other tellers every day. And so the world has to keep adopting it.
BARTIROMO: That's not going anywhere, ATM machines. That's for sure. Great to have you on the program, Brian.
MOYNIHAN: It's great to be here.
BARTIROMO: Thank you so much, Brian Moynihan.