December 14, 2009
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Obama Encourages Banks to Lend Money, Pt.1
Fat cat bankersPresident Obama is scheduled to meet with the nation's top credit card company executives today in an attempt to convince them to write more small business and homeowner loans. Ten of the top Wall Street banks along with Citigroup and Goldman Sachs will be meeting with the President shortly before bonuses are due to be issued. A White House official said that the President will be speaking with credit card companies and other financial institutions about the size of the bonuses and executive salaries and the companies' "special responsibility" to Americans. The president received a great deal of criticism as large banks and credit card companies borrowed taxpayers' money to bail themselves out of a mess of poor management. To taxpayers' dismay, these same companies turned around and used the bailout money to issue large bonuses to these same executives whose poor decisions created the financial crisis. President Obama has also displayed his disappointment in the banks' decisions to issue large bonuses with taxpayers' money by addressing them as "fat cat bankers" in a recent CBS interview.
Most of the big credit card companies and banks have already made arrangements to repay back the taxpayers' bailout money. Citibank is the last remaining large credit card company to finalize a repayment deal. The bank is currently negotiating with government officials for approval to exit the bailout program. With nearly every large company having exited the program, President Obama will need to find other means of getting his way. Rahm Emanuel, White House Chief of Staff said they are searching for more ways to motivate banks to step up participation in the nation's economic recovery.
Despite all the criticism over the bailout program, the White House maintains that the program was successful. Officials have credited the banks' and credit card companies' rapid exit out of the program as proof that the program was effective in recovering a near disaster financial system. Now lawmakers expect the banks to do their share by giving the economy a boost through increased lending which would create more jobs and help Americans in danger of bankruptcy and home foreclosure.