President Obama, speaking at the close of a meeting with top bank executives Monday, called on Wall Street to make an "extraordinary" effort to boost the U.S. economy in return for the largely repaid taxpayer bailout the banks took with few strings attached.
Hailing the success of the $700 billion bailout program, the president said he urged the financial industry to next boost lending to businesses and curtail bonus payments. He said he heard some positive proposals from the CEOs and now expects "results."
"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, referring to the Wall Street bailout package enacted last year at the height of the crisis.
He also said banks cannot stand in the way of financial regulatory reform.
The president set a tense tone for the meeting in an interview broadcast the night before in which he called Wall Street bankers "fat cats" whom he has little obligation to help.
He said Monday afternoon that he has no interest in "vilifying" Wall Street but wants them to be fully on board with efforts to spur job growth on Main Street.
"We expect them to explore every responsible way to help get our economy moving again," Obama said.
White House senior adviser David Axelrod said on ABC's "Good Morning America" that the industry has to "accelerate lending to credible small businesses" and suggested Congress would take harsh action against the sector if it does not.
"People are not going to tolerate a situation where the bankers have a party, they pick up the tab and then the bankers pay themselves huge bonuses and they're not lending," Axelrod said, adding that bankers should be awarded with long-term stock as opposed to up-front cash bonuses.
The White House also wants Wall Street to fall in line with Obama and back a proposal for a consumer protection agency that cleared the House last week.
"I did not run for office to be helping out a bunch of fat cat bankers on Wall Street," Obama told CBS' "60 Minutes" in an interview that broadcast Sunday.
The executives had been planning to stand up to the president on issues they say his statements oversimplify -- particularly the creation of the Consumer Financial Protection Agency
"He can say what he wants, but we're not going to go back to the kind of lending that put us in this mess," said a person who was helping prepare executives for the meeting but spoke anonymously because of lack of authorization to discuss the plans.
A dozen executives were on the list of those coming, from Bank of New York Mellon Corp., Bank of America Corp., U.S. Bancorp , JPMorgan Chase & Co. The heads of Morgan Stanley, Goldman Sachs and Citigroup were expected to attend but had to appear via teleconference because of inclement weather in New York City that prevented air travel.
Citigroup announced Monday that it is repaying $20 billion in bailout money it received from the Treasury Department, in an effort to reduce government influence over the banking giant. The government will also sell its stake in the company.
The New York-based bank was among the hardest hit by the credit crisis and rising loan defaults and got one of the largest bailouts of any banks during the financial crisis. The government gave it $45 billion in loans and agreed to protect losses on nearly $300 billion in risky investments. Wells Fargo & Co. remains the last national bank that has yet to pay back its bailout money.
Obama said Monday that his administration is determined to recover "every dime" from the package.
Republican Party Chairman Michael Steele said Monday that Obama "should recognize that banks aren't going to lend money to people who won't pay them back. Banks can open the floodgates of cash, but you have inability of small business owners to pay back the loans."
Steele said on NBC's "Today" show that less regulation would return many small businesses to profitablity.
Bankers believe the president has mischaracterized them as being against the new rules, when in fact they support the vast majority of the administration's proposals.
One industry official said Obama is viewed as trying to paint the debate as either "You're with us or you're against us." The industry official said bankers did not view it that simply.
"We want him to know we have the same goals, but disagree about how to get there," the official said.
Bankers were planning to outline alternatives to the new consumer agency. Most lenders support strengthened consumer protections but believe the administration proposal would increase costs and create more gaps between regulators.
Many firms have taken steps toward the administration's goals of tying pay to long-term performance and making sure companies do not encourage risky bets. Bowing to public outrage, Goldman Sachs announced Thursday that 30 top executives will receive long-term stock instead of cash for bonuses this year.
Fox News' Mike Emanuel and The Associated Press contributed to this report.