President Obama said he is proposing to take $30 billion in funds repaid by Wall Street banks and channel it to community and smaller banks so they can give small businesses the credit they need to stay afloat.
In his State of the Union Address January 27, Obama noted that while the country’s major banks are lending again, they are mostly lending to larger companies.
Obama also acknowledged the widespread dissatisfaction with the financial sector bailout. “We all hated the bank bailout. I hated it. You hated it. It was about as popular as a root canal.” Without such action, however, unemployment might be double what it is today, he said.
While the government has recovered most of the money spent on the banks under the Troubled Asset Relief Program (TARP), Obama reiterated his plan to impose a 10-year Financial Crisis Responsibility Fee on the nation’s largest banks. “I know Wall Street isn’t keen on this idea, but if these firms can afford to hand out big bonuses again, they can afford a modest fee to pay back the taxpayers who rescued them in their time of need,” he said.
Obama also stressed the need for “serious” financial reform, noting that he is not interested in punishing banks but rather protecting the economy. He called for Congress to stand firm against lobbyists trying to kill financial regulatory reform, adding that “if the bill that ends up on my desk does not meet the test of real reform, I will send it back.”