Obama Meeting Tuesday With Community Bankers; Will Press Them to Increase Lending
Obama scheduled Tuesday's session as a follow-up to a similar meeting he held last week with some of the nation's top bankers.
At that meeting, Obama implored bankers to help keep the fragile recovery from faltering by increasing lending to small businesses and supporting a rewrite of financial regulations. Those bankers said afterward that they got Obama's message.
On Tuesday, "the president will reiterate to attendees that we all have a stake in getting the economy back on track, from the government to the small and large financial institutions to the private sector," White House spokeswoman Jennifer Psaki said.
Obama plans to discuss the need to increase lending to small businesses, the housing foreclosure crisis "and the importance of passing financial reform to local communities," she said.
The House recently passed a bill that would overhaul the system of financial regulation by granting the government new powers to split up companies that threaten the economy, creating an agency to oversee consumer banking transactions and bringing transparency to shadow financial markets that have escaped federal oversight. The Senate Banking Committee is working on its version of the measure.
Critics say banks are using deposits to buy securities instead of lending money. Bankers and analysts say the industry is just following the road map for managing its finances early in a recovery, when the risk of borrowers defaulting remains high.
According to the Federal Reserve, loans by the nation's 8,000 banks fell 8 percent to $6.7 trillion in the past year, and some analysts expect them to keep falling at least through next year.
Obama sees unlocking tight credit markets as one way to tackle a national unemployment rate clinging to double digits.
November's unemployment rate was 10 percent, down slightly from 10.2 percent in October. Obama argues that jobs will be created if small business owners -- who employ the majority of U.S. workers -- get the money they need to expand their operations.
Among those invited to meet with Obama in the Roosevelt Room of the White House are Deborah Chequeta Wright, chairman and CEO of Carver Federal Savings Bank of New York, N.Y.; Mark Schroeder, president of German American Bancorp of Jasper, Ind.; and James McPhee, president of Kalamazoo County State Bank of Schoolcraft, Mich.