The White
House
Office of
the Press Secretary
For Immediate Release
December 14, 2009
Remarks by the President on the
Economy
Diplomatic Reception Room
12:38 P.M.
EST
THE
PRESIDENT: Good afternoon, everybody. I've just finished a candid
and productive meeting with the CEOs of 12 of our nation's largest financial
institutions. I asked them to come to Washington today -- at the end of
this difficult year for their industry, but also for the economy -- to discuss
where we've been, what we expect of them going forward, and how we can work
together to accelerate economic recovery.
And that's
why one year ago, when many of these institutions were on the verge of collapse
-- a predicament largely of their own making, oftentimes because they failed to
manage risk properly -- we took difficult, and, frankly, unpopular steps to
pull them back from the brink, steps that were necessary not just to save our
financial system, but to save our economy as a whole.
Today, due
to the timely loans from the American people, our financial system has
stabilized, the stock market has sprung back to life, our economy is growing,
and our banks are once again recording profits. A year ago, many doubted
that we would ever recover these investments, but we've managed this program
well. This morning, another major bank announced that it would be
repaying taxpayers in full, and when they do, we'll have collected 60 percent
of the money owed -- with interest. We expect other institutions to
follow suit, and we are determined to recover every last dime for the American
taxpayers.
So my main
message in today's meeting was very simple: that
That
starts with finding ways to help creditworthy small and medium-size businesses
get the loans that they need to open their doors, grow their operations, and
create new jobs. This is something I hear about from business owners and
entrepreneurs across
Now, no
one wants banks making the kinds of risky loans that got us into this situation
in the first place. And it's true that regulators are requiring them to
hold more of their capital as a hedge against the kind of problems that we saw
last year. But given the difficulty businesspeople are having as lending
has declined, and given the exceptional assistance banks received to get them
through a difficult time, we expect them to explore every responsible way to
help get our economy moving again.
And I
heard from these executives that they are engaging in various programs like
"second look" programs, hiring more folks, raising their target goals
in terms of lending -- all of which sounded positive, but we expect some
results, because I'm getting too many letters from small businesses who explain
that they are creditworthy and banks that they've had a long-term relationship
with are still having problems giving them loans. We think that's
something that we can -- that can be fixed. And so I urged these
institutions here today to go back and take a third and fourth look about how
they are operating when it comes to small business and medium-sized business
lending.
We also
discussed the need to pass meaningful financial reform that will protect
American consumers from exploitation and American -- the American economy from
another financial crisis of the kind which we just came out of.
I noted
the resistance of many of the financial sectors to these reforms -- the
industry has lobbied vigorously against some of them -- some of these reforms
on Capitol Hill. So I made it clear that it is both in the country's interest
-- and ultimately, in the financial industry's interest -- to have updated
rules of the road to prevent abuse and excess. Short-term gains are of
little value to our banks if they lead to long-term chaos in the economy.
And I made
very clear that I have no intention of letting their lobbyists thwart reforms
necessary to protect the American people. If they wish to fight
common-sense consumer protections, that's a fight I'm more than willing to
have.
The way I
see it, having recovered with the help of the American government and the
American taxpayers, our banks now have a greater obligation to the goal of a
wider recovery, a more stable system, and more broadly shared prosperity.
So I urged
them to work with us in Congress to finish the job of reforming our financial
system to bring transparency and accountability to the financial markets; to
ensure that the failure of one bank or financial institution won't spread
throughout the entire system, and to help protect consumers from misleading and
dishonest practices with products like credit and debit cards, with mortgages
and auto and payday loans.
Now, I
should note that around the table all the financial industry executives said
they supported financial regulatory reform. The problem is there's a big
gap between what I'm hearing here in the White House and the activities of
lobbyists on behalf of these institutions or associations of which they're a
member up on Capitol Hill. I urged them to close that gap, and they
assured me that they would make every effort to do so.
In the
end, my interest isn't in vilifying any one person or institution or industry;
it's not to dictate to them or micromanage their compensation practices to
ensure that consumers and -- my job is to ensure that consumers and the larger
economy are protected from risky speculation and predatory practices, that
credit is flowing, that businesses can grow, and jobs are once again being
created at the pace we need.
Some of
the banks and financial institutions have taken small but positive steps to
improve lending to small and medium-sized businesses, as I indicated.
They've begun reworking mortgages that are now underwater because of declining
home values, and they have acknowledged that much more needs to be done going
forward. Many have begun to follow our lead in shifting from paying huge
cash bonuses to awarding long-term stock, which will encourage more prudent
decision-making -- but, as I indicated in this meeting, they certainly could be
doing more on this front as well.
These efforts
reflect a recognition ultimately that the fate of our
financial institutions is tied to the fate of our economy and our country --
and these institutions can't endure if workers don't have jobs, and businesses
can't grow, and consumers don't have money to spend. Ultimately, in this
country, we rise and fall together -- banks and small businesses, consumers and
large corporations, and we have a shared interest in working together to ensure
a lasting recovery that will benefit all of us and not just some of us.
I called
today's meeting with this in mind, and I told the group that I look forward to
continued engagement and progress in the months and years ahead.
Thank you.
END
12:46 P.M. EST