HENRY J. PULIZZI
The Wall Street Journal
December 14, 2009
President Obama spoke Monday during a meeting with the members of financial-services industries at the White House.
WASHINGTON — President Barack Obama pressed executives from the country’s biggest banks to “explore every responsible way” to boost lending and help the economy get back on its feet, and urged them to back up their stated support for a proposed regulatory overhaul.
“My main message in today’s meeting was very simple: that 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,” Mr. Obama said after the White House meeting. “That starts with finding ways to help creditworthy small and medium-sized businesses get the loans that they need to open their doors, grow their operations and create new jobs.”
Mr. Obama called his session with the leaders of 12 banks, including Goldman Sachs and J.P. Morgan Chase & Co., candid and productive. But he also touched on the tension that has sprouted between Wall Street and the administration, saying banks need to “close the gap” between their public statements of support for regulatory reform and their lobbying against the effort on Capitol Hill.
One of the meeting’s participants, U.S. Bancorp CEO Richard Davis described the gathering as “very productive” and said “there wasn’t a lot of disagreement.”
“He didn’t call us any names,” Mr. Davis said, referring to Mr. Obama’s reference Sunday to Wall Street “fat cats” on CBS’s “60 Minutes” program.
“They’re still puzzled why is it that people are mad at the banks. Well, let’s see,” Mr. Obama said on the program. “You guys are drawing down $10 [million], $20 million bonuses after America went through the worst economic year that it’s gone through in — in decades, and you guys caused the problem. And we’ve got 10% unemployment.”
Earlier Monday, Citigroup took steps to emerge from government protection, saying it would repay $20 billion in aid and exit the program through which the U.S. would cover billions of dollars in loan losses. The Treasury Department said it will start unwinding its 34% stake in Citigroup by selling up to $5 billion of its common stock and the remainder over the next six to 12 months.
The meeting was attended by Lloyd Blankfein of Goldman Sachs; Ken Chenault of American Express; Mr. Davis of U.S. Bancorp; Jamie Dimon of J.P. Morgan Chase; Richard Fairbank of Capital One; Bob Kelly of Bank of New York Mellon; Ken Lewis of Bank of America; Ron Logue of State Street Bank; John Mack of Morgan Stanley; Dick Parsons of Citigroup Inc.; Jim Rohr of PNC ; and John Stumpf of Wells Fargo.
Messrs. Blankfein, Mack and Parsons participated via video conference after their heavy fog in Washington delayed their travel.
The administration was represented by White House adviser Valerie Jarrett; Council of Economic Advisers Chair Christina Romer; National Economic Council Director Larry Summers; and Treasury Secretary Tim Geithner.
In a statement Monday, Mr. Dimon said J.P. Morgan Chase was doing its part to support small businesses, boost lending, modify mortgages for strapped homeowners, support regulatory reform and uphold sound compensation practices.
“This is simply what a bank should do,” Mr. Dimon said.
But the J.P. Morgan statement also said that the bank shares “concerns” that some of the regulatory proposals could restrict lending and hurt economic growth and job creation.
