Obama To Bankers: Increase Lending
ROBERT SIEGEL, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
MELISSA BLOCK, host:
And I'm Melissa Block. Wells Fargo has announced plans to repay its $25 billion bailout loan from the federal government. That makes it the last of the big Wall Street banks to emerge from the bailout program, but President Obama insists that the repayments do not even the score. Today, Mr. Obama met with a dozen big bankers at the White House. He urged them to play a greater role in the economy's recovery. He called for their support for new financial regulations and asked them to boost credit for small businesses. In a moment, we'll debate the question of what obligation, if any, the banks have beyond paying back the bailout money. First, NPR's Scott Horsley reports from the White House.
SCOTT HORSLEY: The White House meeting came one day after a "60 Minutes" broadcast in which Mr. Obama complained he hadn't run for office to help fat cat bankers. His tone today was somewhat softer. He said he doesn't want to vilify the banking industry, but to make sure credit is flowing so businesses can grow.
President BARACK OBAMA: 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.
HORSLEY: Mr. Obama said he is getting too many letters from small business owners who can't get bank loans they need to hire additional workers. Anna Baim could have written one of those letters. She owns a textile company in Imperial, Missouri, and has tried repeatedly to get credit without success.
Ms. ANNA BAIM (Owner, Bernhardt Industries): I have three local banks that I do business with every day, banks that I carry healthy cash accounts with. Nobody would talk to me. I even sit as one of the board members on one of those banks. And they wouldn't lend me any money.
HORSLEY: Baim's company, Bernhardt Industries, has been losing business to foreign competitors. Her textile factory once hummed with 120 workers, but now echoes with only 10. She's been pursuing opportunities to rehire some of the laid off seamstresses but said she can't do that without credit.
Ms. BAIM: I would have put people back behind the machines that I've got. I would have been able to acquire new equipment. It would have changed the way we operate here.
HORSLEY: Mr. Obama wants bankers to change their lending practices. He said he heard some encouraging words today about banks giving a second look to loan applications, but words alone are not enough.
Pres. OBAMA: We expect them to explore every responsible way to help get our economy moving again.
HORSLEY: The Treasury Department has launched several efforts to encourage lending to small firms and Treasury Secretary Timothy Geithner said that's one of his main goals in extending the bank bailout program. But Harvard Law Professor Elizabeth Warren, who heads a congressional panel overseeing the bailout, is skeptical.
Professor ELIZABETH WARREN (Professor of Law, Harvard University): It's not news to anyone that small business landing is important. Small businesses are closing everyday. But Treasury has now announced three plans and clearly has not gotten the job done.
HORSLEY: Geithner said that government has tried the bankroll small business loans by providing bailout funds to smaller banks. But unlike big banks that were required to take the government's money, many smaller banks have chosen not to.
Secretary TIMOTHY GEITHNER (Department of Treasury): And their concern that if they come, they will be stigmatized and they will be subject to the risk of conditions in the future that might make it harder for them to run their businesses.
HORSLEY: The government money does come with a lot of strings attached, something the Treasury Department is looking at changing. Bankers offer a number of other explanations for why small-business lending is down. Sometimes it's the banks being cautious, sometimes it's their regulators and sometimes it's the small-business people themselves, who are reluctant to take on more debt in the face of an uncertain economy. Senior Vice President Paul Merski of the Independent Community Bankers of America says that's the problem the administration really needs to fix.
Surveying her largely empty factory, Anna Baim agrees. The Missouri businesswoman needs credit to start hiring, she says. But what she really needs is more business.
Scott Horsley, NPR News, Washington. Transcript provided by NPR, Copyright NPR.
Surveying her largely empty factory Anna Baim agrees. The Missouri businesswoman needs credit to start hiring, she says. But what she really needs is more business.
Scott Horsley, NPR News, Washington.
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