At a meeting held at the White House on Monday, President Barack Obama urged Wall Street banks to do their part to rebuild the economy as soon as possible. His argument was that American taxpayers have done their part to contribute funds for federal bailouts. Now that the banks are back on their feet, he expects them to circulate the money and help the economy get back on its feet.
In his speech, Obama applied a bit of pressure on the nation’s top dozen bank chief executives to accomplish the following:
- Open up lending: Obama wants banks to open up the lending spigots so that economy recovery can speed up a bit.
- Curb compensation: He also mentioned that some of the top executives needed to curb the high-level compensation.
- Stop gouging: Even though the Credit CARD Act is close to being implemented, Obama still urged the top banks to stop gouging customers with high credit card rates and hidden overdraft fees.
In a public statement made after the meeting, Obama said he also wanted bankers to stop lobbying against parts of the financial legislation that would prevent a future financial crisis.
Are Banks Taking Him Seriously?
According to some attendees from the meeting, some of the bank executives may not be taking the president as seriously as he would like. While it seems that the executives may have appeared to agree with his sentiments, some critics suggests that the federal government may have lost its leverage over the banks that repaid their bailout money.
Also, it seems that some of the New York chief executives from some of Wall Street’s largest banks didn’t show up because they said fog delayed their flights. They instead attended via teleconference.
What About the Taxpayers?
It seems the moral of the story may be that some of the banks don’t want rules shoved down their throats if they feel they’ve done their parts. At least, this is referenced in a new report recently released by the American Bankers Association that says banks made $2.2 trillion in new loans since receiving the TARP funds. Additionally, there is word that Washington has created an unstable regulatory environment, which has slowed lending.
Hopefully, a cross between banks and the White House won’t have a negative effect on the millions of Americans who are desperately trying to stay afloat. Rebuilding the economy stretches beyond chief executives’ goals, so we hope that everyone can get on the same page to make much-needed improvements for those truly affected: the American people.