US President Barack Obama Monday talked tough with US bank chiefs, demanding they boost lending to create jobs, after raising the stakes for the White House talks by slamming Wall Street “fat cats.”
Obama also said the senior bank executives that he would relish a fight unless they dropped objections to his plan to pass the most sweeping regulatory reform since the 1930s Great Depression.
Obama, adopting a populist tone that gelled with public fury at Wall Street as the US faces 10 percent unemployment, called on bank bosses to expand lending to unleash job growth driven by small businesses.
“America’s banks received extraordinary assistance from American taxpayers to rebuild their industry and now that they’re back on their feet we expect an extraordinary commitment from them to help rebuild our economy,” he said.
Obama said in a televised statement after the meeting that bank executives told him they were making honest efforts to free up credit, especially for small businesses, but complained “we expect some results.”
The administration is seeking to promote small businesses as a vehicle for creating jobs, and Obama has promised more government help to designed to spur lending.
“I’m getting too many letters from small businesses who explain that they are credit worthy, and banks that they’ve had a long-term relationship with are still having problems giving them loans,” he said.
Obama also took on banking executives resisting his attempts to pass major regulatory reforms, including the formation of a consumer protection agency to protect bank and credit card customers from predatory lending.
“If they wish to fight common-sense consumer protections, that’s a fight I’m more than willing to have,” he said, rebuking banks for hiring lobbyists to resist his reform effort.
Critics say the US financial industry helped trigger the global economic meltdown and only survived thanks to billions of dollars of emergency taxpayer funding, but is now piling up profits at the expense of consumers.
“The way I see it, having recovered with the help of the American government and the American taxpayer, our banks now have a greater obligation to the goal of a wider recovery, a more stable system and more broadly shared prosperity,” Obama said.
Finance industry titans invited to the meeting included Ken Chenault, president and CEO of American Express; Jamie Dimon, chairman and CEO of JP Morgan Chase, Ken Lewis, president of Bank of America and Gregory Palm, executive vice president and chief counsel of Goldman Sachs.
After the meeting, Bank of America announced that its CEO Lewis had told Obama his firm would expand lending to small and medium sized businesses by at least US$5 billion next year.
“Bank of America is determined to do our part to help the economy grow next year and reduce unemployment by making every good loan we can make,” Lewis said.
Dimon said that he would support the administration’s goals of “increased and responsible” lending, better consumer protections and responsible executive pay.
White House Spokesman Robert Gibbs said he would leave it up to finance chiefs to announce how they would respond to the meeting, but added that Obama would be watching.
“The important thing is not what somebody says in a meeting, but the actions that will follow,” Gibbs said.
“The president will evaluate their actions going forward,” he said.
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