Obama tells banks to boost lending

U.S. President Barack Obama pressedbank executives Monday to do more to lend to homeowners and small- and medium-sized businesses.

Obama met for more than an hour with the CEOs of 12 banks, among them American Express, Bank of America, Capital One, Citigroup, JPMorgan Chase, Morgan Stanley, and Wells Fargo.

At a news conference afterwards, Obama told journalists that now that the banks are making profits, they should be doing more lending.

"America's banks received extraordinary assistance from American taxpayers to rebuild their industry," he said. "And now that they're back on their feet, we expect an extraordinary commitment from them to help rebuild our economy. "

Obama said he told the bankers to take a "third and fourth look" at ways to improve businesslending.

"No one wants banks making the kinds of risky loans that got us into the situation in the first place we expect them to explore every responsible way to help get our economy moving again," he said.

Glenn Mitchell, an architect with BeddGroup Architects and Builders in Washington, D.C., told CBC News he applauds Obama's words.

Mitchell's orders have dropped as competition for a decreasing amount of work becomes intense.

'Everything is sought after aggressively' Glenn Mitchell, BeddGroup Architects

"Before, you could depend on certain projects being left alone by large or medium-sized companies," he said. "That's no longer the case. Everything is sought after aggressively."

His credit rating is very good, he said, but the banks look at how many jobs he has pending.

"What we hear is 'Hey, you can submit it but it doesn't look good,' and that's what we've been hearing all around," he said.

Mitchell wants banks to start making their lending decisions more on the basis of his credit rating than on his order book.

He said his small startup firm is in "a desperate situation, like many others in this country and we are hoping the bankers heed President Obama's call to do something to help small businesses."

Obama promotes financial reform

Obama also urged the bankers to support his moves to reform the financial system and pushed them to curtail executive bonuses.

"They could be doing more," he said.

Obama also toldthem toback a proposal for a consumer protection agency that cleared the House last week.

The president said the bankers told him they supported reform but added there was a gap between that and what bank lobbyists were doing on Capitol Hillto oppose his measures.

"If they wish to fight common-sense consumer protections, that's a fight I'm more than willing to have," Obama said.

He took no questions at the news conference.

Bankers 'fat cats'

The president'spitch may not have been helped by his description a day earlier of bankers as "fat cats." Obama told CBS's 60 Minutes in an interview that "I did not run for office to be helping out a bunch of fat cat bankers on Wall Street."

Many in the banking industry say their ability to lend has been constrained by the government's requirements that they hold more assets to shore up their balance sheets and protect themselves from further mortgage and loan defaults by businesses and consumers.

The government has lost much of its leverage over the banks after accepting repayment of $116 billion in bailout money.

The meeting came asCitigroup announced Monday it will become the last of the big Wall Street banks to pay back $20 billion US, the last of its share of bailout money.