A few hundred yards from Charlotte's bank towers, U.S. Treasury Secretary Timothy Geithner defended the Obama administration's relations with the financial industry and the controversial package of new regulations still being written.
In a black leather armchair before the Charlotte Chamber, Geithner touted job training and high-tech manufacturing before fielding some fairly pointed questions from the city's business community.
The Charlotte stopover came as the Obama administration is making it increasingly clear that North Carolina will play a key role in his re-election efforts, particularly ahead of the Democratic National Convention here in September.
The night before, President Barack Obama dealt at length with the financial industry in his State of the Union address. Among numerous proposals, the president announced creation of a Financial Crimes Unit to deal with large-scale fraud and an abusive lending investigative unit made up of federal prosecutors and state attorneys general.
Geithner reiterated some of the president's points and sought to rebut suggestions that the regulations go too far.
Geithner also denied that the administration is hostile to the financial industry and called some criticisms of the Dodd-Frank financial reform law "unfair" and without merit.
"They're tough where they need to be tough," Geithner said of the regulations. "We're not going to get it perfect, but we're going to work hard at it."
The Obama administration has been criticized by bankers and Republican officeholders for its approach to financial regulation, particularly Dodd-Frank, passed by Congress in 2010.
Among its provisions are a cap on the swipe fees banks charge merchants on debit-card transactions and the creation of the Consumer Financial Protection Bureau to regulate banks and other financial institutions.
Republican presidential candidates in particular have called the massive law an example of job-killing government overreach. On Tuesday, U.S. Rep. Patrick McHenry, R-N.C., told the new head of the consumer protection bureau during a congressional hearing that he would wield too much power.
And banks have said Dodd-Frank's provisions will cost them billions of dollars in lost revenue and slow economic recovery by hampering lending.
'Safer financial system'
But Geithner asked his audience to look back at the damage caused by the 2008 financial meltdown and said the administration took needed steps to make sure it couldn't happen again.
"We are making a huge amount of progress in making a stronger, safer financial system," Geithner said. He said banks are stronger, with more capital, and credited the administration's quick moves for the progress.
By the end of the year, he said, the cornerstones of financial regulation will be in place: plans to wind down big banks should they fail without impacting the entire system, make derivative markets safer and strengthen consumer protections.
Geithner said the administration has been criticized for being too soft on banks and for being too tough.
"They cannot both be right," he said. "And they are both wrong."
One questioner brought up two main criticisms of Dodd-Frank: that it made big banks even bigger, and that they hurt community banks. Geithner said both are without merit.
He said that the largest U.S. banks make up a smaller part of the financial system than in the strongest foreign economies and that community banks are largely exempt from the law's provisions.
Still, he stressed the importance of striking a balance between ensuring stability and fostering a competitive and innovative financial sector.
"I listen to that criticism very closely," Geithner said. "The costs of getting these things wrong are brutally damaging."
Geithner's first stop in the Charlotte area was at the Siemens Charlotte Energy Hub, a plant that manufactures turbines and generators for energy production. In November, the company opened a $350 million gas turbine expansion.
Both energy and manufacturing played a major role in Obama's State of the Union address on Tuesday.
The treasury secretary was briefed by Siemens executives before taking a quick tour of the more than 1 million-square-foot facility and meeting employees.
One of them was Jackie Bray, the Kings Mountain woman who sat next to first lady Michelle Obama at the State of the Union address. The president used her story - from a layoff, to a classroom at Central Piedmont Community College, to a job at Siemens - as a model of success in manufacturing and job training.
At the Chamber, Geithner touted the company as an example of the strength and future of the American economy.
But he also said that the country needs to work on its science and research education, infrastructure and job training to make sure workers can compete for manufacturing jobs - borrowing Obama's phrase by calling it an economy "built to last."
"That's the fundamental responsibility of people holding public office," he said.
To read more, visit www.charlotteobserver.com.