'The lines of communication have been open': Webster Bank EVP on The Department of Treasury

The Federal Reserve announced plans to provide nearly $2.3 trillion in loans to support households and local governments. Webster Bank EVP Nitin J. Mhatre joins Yahoo Finance’s On The Move to discuss how the government is handling its response to PPP loans and mortgage relief.

Video Transcript

ADAM SHAPIRO: Welcome back to Yahoo Finance. We're watching a rally on Wall Street. The NASDAQ up more than 30 points, Dow up 360 plus points, and the S&P 500 up more than 40 points.

We are all aware of the historic steps the US government has taken to try and save small businesses. Now we're learning about what the Fed's going to do to help those mid-sized businesses. But the people who are going to have to deliver that money through these loan programs are the bankers in the country.

And joining us from Webster Bank is the Executive Vice President, Head of Community Banking and Marketing, Nitin Mhatre. It's good to have you here, sir. We appreciate it.

I wanted to ask you, your experience-- let's start with the Paycheck Protection Program, the initial $349 billion. They're going to add more to it. That's what the Treasury Department is asking for. But your customer experience so far, what's that been like for your customers?

NITIN MHATRE: Thank you for having me, Adam. It is definitely a really good program that's going to help the businesses keep their employees on the payroll, and help keep their businesses open. The program was launched on Friday. And it has had a significant number of changes. But I think the banks are ready to roll out the program.

And just to give an example, for us, from last Friday itself, we have been able to take applications from almost 12% to 13% of our businesses that bank with us. And we are processing those applications as quickly as we can, with the intent to get those funds in their pockets as quickly as we possibly can.

JULIE HYMAN: Nitin, it's Julie here. So it sounds like things have gone relatively smoothly for you all. But you said there have been changes already, right? And this is a very quickly changing process. What is the communication been like from Treasury and the other authorities from the Fed, for example, as you've tried to work through all of this?

NITIN MHATRE: The communication has been good. I think the program rollout was a little bumpy. And the guidelines and the application forms and the notes have been coming. It's a rolling guidance.

But the communication has been exceptional. And not just from the banking sector and trade associations, like Consumer Banker Association and others, the lines of communication have been open. And we've been giving that feedback constantly, and they're reacting to that feedback.

A program of this size is not easy to launch in a day. We recognize that. But we also want to make sure that we are able to fulfill the intent of the program, and get the funds in the businesses' pockets as quickly as we can.

JULIA LA ROCHE: Nitin, it's Julia La Roche. When you're in the community banking business, you just have such a great read on what is really happening in Main Street America. We've seen the surveys of small businesses. We've seen the initial jobless claims numbers that are really stark. We understand that there's a lot of economic carnage when it comes to the COVID-19 pandemic.

Just based on your conversations with your clients, can you give us a read of what you're seeing?

NITIN MHATRE: There is a significant amount of concern. And outside of the health part, the health crisis part, the concern itself, it's the concern around the economy. It's this concern about how do I make ends meet? As a consumer, people are worried about, hey, will I have the ability to pay my bills? Will my credit get damaged through this process?

The businesses are thinking about, hey, will I have a chance of surviving this cycle? And if I survive, what does my new business model look like? And I think that's where Webster Bank, and community banks, and pretty much all banks are trying to do their best to give that sense of confidence in terms of here's how you could keep your business alive. Here's how you could manage your credit as a consumer.

Because when the other side of the cycle comes through, we want you to be able to be strong financially, and get back into business.

ADAM SHAPIRO: Nitin, I want to shift this more to the homeowner. Because part of what's going on is mortgage relief. Can you give us an idea about how many of your customers have had to request perhaps some kind of deferral on mortgage payments? And how that all works?

NITIN MHATRE: Absolutely. And just to give a little bit of history, Webster's been a bank since 1935, which was started right in the middle of the Great Depression. So we were the only bank back in a previous recession that was mentioned as the only bank in the country that had a foreclosure moratorium. So this comes very easily for us.

But this time around, it feels like there is good guidance coming from the states and the federal government around the foreclosure moratorium. So just to give you a scale, we've been able to help almost 7% to 8% of our customers already, who raised their hands and said they might have difficulties making their payments. And we announced that in the middle of March. And customers have taken benefit of that already.

And I think we also work with our state government and the Consumer Bankers Association, Connecticut Bankers Association, for a public-private partnership, that announced not just a foreclosure moratorium for 60 or 90 days, but a 90-day grace period on the payments, no fees or charges for the next 90 days, and also making sure that people who participate in these relief programs don't have their credit scores impacted. So I think there has been a broad-based effort, both from the banking sector, as well as different state and federal levels.

JULIE HYMAN: What is all of this going to mean for you, the bank, financially? Because as you're funneling loans through, I wonder, for example, what your profit if any is on those loans. Mortgage forbearance obviously means that you have to then wait to have that money coming in. I imagine deposit growth has slowed, if not reversed, so you're not getting as much interest on deposits you hold.

So what does this mean for you, and how poised are you to weather all of this?

NITIN MHATRE: Oh, there is significant amount of headwinds here, both with the interest rate environment where it is, and this peculiar situation that we're dealing with. But situations like this is when we go back to our roots, and think about what our founder said, where he said take care of our customers, and everything else will take care of itself. So we're focused on doing absolutely the right things for our customers right now, and then think about what it means to bringing back our shareholder value to where we would like it to be.

At this point of time, we believe the more we help our consumers and businesses get back on their feet quickly, it will help us in the long run. So we're really focused on that part of it.

ADAM SHAPIRO: OK, Nitin Mhatre is Webster Bank's Executive Vice President, Head of Community Banking and Marketing. We wish everybody at Webster Bank the best.