Obama admonishes top bankers to step up economic recovery efforts

President Barack Obama tried to hold the nation's top bankers' feet to the fire Monday, admonishing them for some of their lending practices.

Obama, who on Sunday said he didn't run for office to help "fat cat bankers," told representatives of 12 of the nation's top financial institutions they need to increase lending, get on board with financial regulatory reform and change their compensation practices.

The president noted that taxpayers stepped up and aided banks with enormous loans during the financial crisis last year, and he now expects "an extraordinary commitment" from the banks to help the economy recovery.

"So my main message in today's meeting was very simple: that 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," Obama said after the meeting.

Bank executives meeting with Obama included JP Morgan Chase Chairman and CEO Jamie Dimon, Bank of America President and CEO Ken Lewis and Wells Fargo President and CEO John Stumpf.

Goldman Sachs CEO and Chairman Lloyd Blankfein, Morgan Stanley Chairman and CEO John Mack and Citigroup Chairman Dick Parsons were unable to attend because of bad weather.

The meeting comes as some banks that received federal bailouts rush to repay the government, in part to escape rules that would otherwise limit the bonuses they are prepared to hand out.

As the banking industry has rebounded, small businesses have continued to face difficulties in attaining credit. That’s exacerbated unemployment, which stands at 10 percent.

The president, speaking in the White House Diplomatic Room, said he encouraged the bankers to find creative ways to increase lending without making the kinds of high-risk loans that led, in part, to the original crisis.

Obama said that "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."

The president also excoriated the bankers for fighting his administration on financial regulatory reform, saying he "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 commonsense consumer protections, that's a fight I'm more than willing to have," Obama said.

Much of the banking lobby fought proposals included in the regulatory reform bill approve by the House on Friday, including a measure to create a new Consumer Financial Protection Agency. The industry also worked to weaken other parts of the legislation.

The president said the executives told him that they do support reform, but Obama pressed them to do more to call off their lobbyists on Capitol Hill.

"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," Obama said. "I urged them to close that gap, and they assured me that they would make every effort to do so."

Richard Davis, chairman of US Bancorp, told reporters after the meeting that he and other executives do support the reform Obama has called for, but Davis acknowledged that "we haven't done a good job of showing it."

Davis said the meeting was productive, and Obama "didn't call us any names."

Davis and other executives had the look of students emerging from the principal's office, as they agreed with Obama on every point.

"The bankers are not surprised by the public response," Davis said, adding that they are aware "we're under a microscope."

Davis said that "viscerally," they agree that banks should do more lending, but he cautioned that there is a "time and a place" for low-risk, high-reward lending.

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