The consumer is “doing pretty well,” Brian Moynihan, president and CEO of Bank of America, told CNBC Tuesday.
CNBC.com
Bank of America
“We‘ve seen our credit trends continue to be positive from the second quarter into the later part of the year,” he said. “Consumer spending in our franchiseis up.”
Moynihan noted that consumer spending is down this month and last, typical of the “back-to-school” period and in line with other years, but added, “consumers are hanging in there, they are spending.”
Investor's Business Daily and TechnoMetrica Market Intelligence said its IBD/TIPP Economic Optimism Index rose to 45.3 in September from 43.6 in August, reported Reuters. A number above 50 indicates optimism among consumers, while a figure below 50 signals pessimism.
“We’ve been pleased because eight quarters ago it was a different story [with credit cards], where there were lots of the delinquencies, lots of charges. That’s largely behind us.”
Moynihan said that over the last year and a half the bank has worked through some 600,000 mortgage modifications, resulting in some of those borrowers keeping their homes.
“You are giving people a chance,” he said of the process. “This is very hard work and tough for the consumer. The reality is 100 percent would have gone into default when we started. It’s much better than doing nothing.”
The next stage for BofA is to try and work through solutions for those who are unemployed homeowners, he said. He expects that process to take about two years.
Moynihan also noted that BofA will not find it necessary to raise capital in order to meet the requirements of the Basel III international banking rules, which he called "a reasonable set of standards."