• Lisa Simpson
• Nov 4,2009
• In: Bank Foreclosures

President Barack Obama Underlined the Need of Banks Advancing Loans

In a weekly address to the nation flashed over the radio and Internet President Obama underlined the need of banks to show their thanks for having received bailout funds, by advancing loans to small business enterprises. The latter group continues to be neglected with credit being frozen for all practical purposes since the crisis made its debut.

Obama said, “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 creditworthy small businesses and make the loans they need to open their doors, grow their operations and create new jobs. 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.”

The President further said that the government would take all the required steps to “encourage them to meet those responsibilities.” However he did not give details of the steps that would be taken.

This is the latest among many populist stands the President has taken to put pressure on the financial sector that has so far not responded to overtures made by the government; consequently foreclosures as well as unemployment are continuing.

Recently President Barack Obama came down harshly on the banks and other financial groups working through the Congress to make the Consumer Financial Protection Agency weak. He charged them for making use of “every bit of influence they have to maintain the status quo that has maximized their profits at the expense of American consumers, despite the fact that recently those same American consumers bailed them out as a consequence of the bad decisions that they made.”

The financial assistance in the form of bailout measure had dipped into the taxpayer’s kitty by taking $700 billion.

In his weekend address President Obama pointed out that the small business groups had generated about two thirds of the new jobs in the country over the last fifteen years. As such he felt they should be given top priority in all recovery measures. He said, “They must be at the forefront of our recovery.”

In 2009 from the $787 billion stimulus package, $5 billion went for tax breaks for the small business groups. The cost of Small Business Administration loans were also reduced said Obama. In the previous week he had requested Congress to increase the amount of some of these SBA loans. He also spoke of a giving low interest loans to the smaller banks who agree to grant loans to the small entrepreneurs.