- The Washington Times - Wednesday, December 23, 2009

One week after summoning Wall Street executives to discuss lending and financial-regulation reform, President Obama spoke Tuesday with the heads of a dozen community banks about their role in helping businesses get the capital they need.

As the nation continues to grapple with double-digit unemployment, Mr. Obama called reviving the credit markets a key to job growth. He told the bankers that he is looking for ways to cut red tape in order to stimulate lending.

“There remain enormous opportunities as we come out of this recession for businesses to start growing again and to start hiring again,” he said.

At 10 percent, November’s U.S. unemployment rate marked a slight improvement over 10.2 percent in October. Mr. Obama has repeatedly cited lending as a means for helping businesses expand their operations and thus create jobs. Earlier this month, he suggested using money left over from the $700 billion Wall Street bailout to help small businesses get credit and expand hiring.

Mr. Obama also stressed the need to pass a financial-regulation-overhaul bill that would create a consumer protection agency and expand the government’s power to break up big banks. The House has approved the legislation, while the Senate is working on its own version.

But the president also acknowledged fears expressed by banking groups that the changes could lead to more regulation that would stifle credit.

“We are looking to see if there is a possibility to cut some of the red tape,” he said. “I think we do have an obligation to make sure that the regulatory schemes that we come up with are more streamlined and more efficient and send clear signals to the banks involved.”

The rhetoric was decidedly milder than at last week’s White House meeting with executives from some of the world’s largest banks and investment firms, a meeting in which Mr. Obama took the firms to task for lobbying against his financial-overhaul bill.

According to the Independent Community Bankers of America, regional banks with $1 billion or less in assets represent 12 percent of all bank assets but support 31 percent of all small-business loans under $1 million. The trade group said it raised concerns with Mr. Obama about “overly aggressive examinations that can hinder small-business lending.”

Treasury Secretary Timothy F. Geithner and senior White House adviser Valerie Jarrett sat in on the meeting with Mr. Obama, who was also joined by Lawrence H. Summers, director of the White House National Economic Council, and Christina Romer, head of the Council of Economic Advisers.

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