October 24, 2009 / 10:43 AM / 10 years ago

Obama presses banks on small business loans

WASHINGTON (Reuters) - President Barack Obama urged banks on Saturday to make more loans to small businesses and said his administration would do everything it can to push them to do so.

U.S. President Barack Obama attends a fundraiser for U.S. Senator Chris Dodd (D-CT) in Stamford, Connecticut, October 23, 2009. REUTERS/Jason Reed

“It’s time for those banks to fulfill their responsibility to help ensure a wider recovery, a more secure system, and more broadly shared prosperity,” Obama said in his weekly radio address, his latest plea for banks to do more for the larger economy.

“And we’re going to take every appropriate step to encourage them to meet those responsibilities.”

Insufficient capital for small businesses is weighing on the U.S. recovery from the worst recession since the Great Depression.

The administration took steps this week to foster lending to cash-strapped business owners, by offering taxpayer capital to the small banks that do much of the lending to them at a lower cost than it had previously.

Obama noted that banks had benefited from the government’s taxpayer-funded $700 billion financial rescue program, and said they must now return the favor.

His administration is increasingly focusing on the disconnect between the broad economy and the big financial firms of Wall Street — where the Dow Jones industrial average recently topped the 10,000 mark after plunging in late 2008 and early 2009.

“These are the very taxpayers who stood by America’s banks in a crisis — and now it’s time for our banks to stand by credit-worthy small businesses, and make the loans they need to open their doors, grow their operations, and create new jobs,” he said.

With the U.S. unemployment rate nearing 10 percent, Obama is under pressure to boost job creation before midterm congressional elections next year.

“Small businesses have always been the engine of our economy — creating 65 percent of all new jobs over the past decade and a half — and they must be at the forefront of our recovery,” Obama said.

Public approval of Obama’s handling of the economy is at about 50 percent, up slightly from September. But many Americans are pressing for more effort to stimulate the economy, saying the administration’s previous attempts have fallen short.

Obama also used the radio address to push healthcare reform, his top domestic policy priority, saying his plan would lower the high costs that make it difficult for small business owners to provide health insurance coverage for their employees.

Editing by Xavier Briand

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