* Community bankers urged to remain politically involved
* Told Dodd-Frank not set in stone
By Dave Clarke
BOSTON, Oct 20 (Reuters) - U.S. community bank executives, fearing a loss of influence in Washington, will start pressing members of Congress personally rather than relying on their paid lobbyists.
The tactic is part of an industry effort to roll back parts of the recently enacted Wall Street reform law, known as Dodd-Frank -- legislation that overhauled regulation of the banking industry after a financial crisis that drove the global economy into recession.
"Political engagement is a job requirement for every banker," Arthur Johnson, chairman and CEO of United Bank of Michigan, told fellow bankers gathered for the American Bankers Association's annual meeting. "Political advocacy is not a seasonal sport."
Bankers from across the country gathered in Boston for a conference that was part pep rally and part therapy session for an industry reeling from the economic downturn and fearing new requirements under Dodd-Frank.
Community bankers and their lobbying groups hardly sat on the sidelines during consideration of the Dodd-Frank Act, signed into law in July. They were able to blunt its impact in several areas by securing exemptions from some requirements for institutions with $10 billion or less in assets.
But executives of these smaller banks said their influence has waned, due in large part to the public relations beating the industry as a whole took during the crisis. Bank bosses, not just lobbyists, now need to get involved with Washington and counteract what they call unfair attacks against industry.
"The danger is -- and the reason we must be engaged is -- that it is so easy to put more regulations on the regulated and the regulated are such a small part today of the full delivery of financial services," said Stephen Wilson, chairman and chief executive officer of LCNB National Bank in Lebanon, Ohio, and the new ABA chairman.
Wilson, in an interview, said bankers' goals on Dodd-Frank should be to "strengthen those parts we like, roll back those parts we don't like, roll back those parts that are harmful to our customers."
That's a message that will likely have more currency in Washington after the November elections, in which political handicappers increasingly see Republicans taking control of the House and making solid gains in the Senate.
Wilson may find himself in a particularly good spot since one of the representatives from the area served by his bank is John Boehner, who is poised to lead the House of Representatives should Republican take control of that chamber of Congress. Wilson noted another representative from his area is conservative Jean Schmidt.
"The good news is they get it, but they did not have the ability to make as much of an impact as we had hoped," he said, referring to the Dodd-Frank Act.
The ABA, which represents both large and small institutions in the $13 trillion banking industry, tried to ease executives' worries, telling them that the fight over Dodd-Frank is not over.
"Rule number one with regard to anything Washington is nothing is ever finished there, nothing is ever permanent," Wayne Abernathy, executive director for financial institutions policy at ABA, told a small group of bankers.
"Rest assured the Dodd-Frank Act is not done. It will be reformed and reformed and reformed again as the years go forward," he said.
Bankers expressed concern about the new Consumer Financial Protection Bureau, curtailment of the Office of the Comptroller of the Currency's ability to preempt state banking laws, and a mandate for the Federal Reserve to crack down on how much banks can receive in fees each time a debit card is used.
During consideration of Dodd-Frank, Congress did take steps to ease its impact on banks with $10 billion or less in assets. For instance, the crackdown on debit card fees as well as many of the new powers given to the Consumer Financial Protection Bureau would not apply to smaller banks.
But bankers at the conference were skeptical about how much that exemption would be worth, arguing rules for big banks will affect them as well. For example, it would be difficult to have a debit card system that allows smaller banks to charge retailers more per transaction than larger banks, they said. (Editing by Gerald E. McCormick)