Obama increases pressure on lenders

President Obama is ratcheting up the pressure on Wall Street to back a financial regulatory overhaul winding its way through Congress, telling top CEOs gathered at the White House on Monday that they owe it the American people after receiving hundreds of billions of dollars in government assistance.

“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,” Mr. Obama said.

The meeting comes as the firms — several of which accepted taxpayer bailout money — continue to balk at key components of a Democratic financial overhaul that would increase the government’s authority over Wall Street and create a new consumer financial protection agency. It also comes on the heels of toughened rhetoric from Mr. Obama, who in a Sunday television interview said he was frustrated by “fat-cat bankers” paying out hefty bonuses in the wake of the bailout and a deep recession.

Related TWT article: Citigroup to repay $20B in TARP loans

Mr. Obama and his top economic advisers met with the 14 executives — including the heads of Bank of America, Wells Fargo and Citigroup — whose firms have received billions of dollars from the Treasury Department’s Troubled Asset Relief Program, which the Obama administration recently extended through next October.

Mr. Obama stressed the need for banks to lend more to small and midsize businesses to help spur job growth, but he said he has no desire to micromanage the sector. He did chide the executives for lobbying against the Democratic financial bill, which passed the House last week.

“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,” he said.

Bank of America became the first of seven firms to repay TARP funds earlier this month, and Citigroup on Monday announced plans to pay back $20 billion. That means the U.S. government will have recovered 60 percent of the money owed by banks, including interest. Mr. Obama said he plans to collect “every last dime.”