Bankers to Obama: Stop trashing us

The American Bankers Association has a message for the president: Stop talking trash about banks.

In his unofficial State of the Union address Tuesday night, Barack Obama said that it's "unpopular ... to be seen as helping banks right now, especially when everyone is suffering in part from their bad decisions."

In a letter to the White House, ABA CEO Edward Yingling says bankers across the country were "disappointed and concerned" with rhetoric like that.

"Mr. President, of the over 8,000 banks in this country, very few ever made a single subprime loan, and they did not engage in the highly leveraged activities that brought down Wall Street firms," Yingling said.

Yingling referred the president to statements made by Rep. Barney Frank (D-Mass.), the powerful chairman of the House Financial Services Committee, in which he said that the toxic mortgage lending that sparked the current crisis was done by mortgage brokers and others not subject to the strict rules that govern commercial banks.

"Mr. President, the failure to distinguish between Wall Street and the thousands of FDIC-insured banks across the country undermines the confidence in our banking industry, the industry which is the foundation on which our economic recovery must be built," Yingling said.

"We stand ready to work with your administration to promote policies that will clear the way to do what banks do best: finance business and families that are ready to move the economy forward. But these efforts will only be inhibited by misperceptions about our industry."

In his speech, Obama said that too many bad loans from the housing crisis have made their way onto the books of too many banks" — and that, "with so much debt and so little confidence, these banks are now fearful of lending out any more money to households, to businesses or to each other."

But traditional bank lending accounts for a mere third of the entire credit markets, Yingling said in an interview on C-SPAN's "Newsmakers" program, and the banks' share actually grew in 2008.



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