Obama: 'Fat-cat' bankers owe help to U.S. taxpayers

Updated 3m ago
By David Jackson, USA TODAY

WASHINGTON — President Obama, already at odds with bankers over big bonuses and new regulations, plans to urge executives at a White House meeting today to provide more loans to small-business owners.

Top White House economic adviser Lawrence Summers said Sunday that Obama will remind the bankers of the taxpayer help they received during last year's financial crisis.

"We were there for them," Summers said on ABCsThis Week With George Stephanopoulos. "And the banks need to do everything they can to be sure they're there for customers across this country."

During a taped interview broadcast Sunday night on CBS' 60 Minutes, Obama blasted banking executives for opposing tighter regulations on Wall Street and for awarding themselves multimillion-dollar bonuses after they had repaid federal bailout money.

"I did not run for office to be helping out a bunch of, you know, fat-cat bankers on Wall Street," Obama said.

The 10% unemployment rate is a major focus of the Obama administration. Last week, the president unveiled a jobs package that includes more infrastructure projects and more loans for small-business owners.

Obama's leverage is limited, however; nine of the 12 banks invited have repaid money they received under the Troubled Asset Relief Program.

The meeting is nothing more than "political theater," said Virginia-based banking consultant Bert Ely. He said "reckless lending" also contributed to last year's financial crisis, and banks across the country are already under pressure from local examiners about making too many "risky loans."

High unemployment is creating a political problem for Obama's team and "they're trying to make political points whenever they can," Ely said.

Scott Talbott, senior vice president of government affairs with the Financial Services Roundtable, said its members are looking forward to a constructive meeting with the president. "Our banks are looking to make good loans," he said.

Republican lawmakers such as Sen. John Thune, R-S.D., said banks and other businesses are being cautious because of "policy uncertainty" in Washington.

"They see more borrowing, more taxing, more debt, more spending and, in the health care bill, they see their premiums going up," Thune said on CNN's State of the Union.

Summers, director of the president's National Economic Council, said on ABC that Obama wants to have "a serious talk" with bankers, some of whom might not be around today were it not for taxpayer assistance.

In his 60 Minutes interview, Obama criticized the banking industry for opposing new regulations on Wall Street proposed in the wake of the financial crisis. The House approved a package on Friday, and the issue now moves to the Senate.

Obama also said he suspects some banks repaid the government in order to hand out lavish bonuses.

Firms that have not repaid the money are subject to pay restrictions by the government.

"People on Wall Street still don't get it," Obama said, adding that bankers should not be surprised at anger over big bonuses. "Why do you think people might be a little frustrated?"

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