* Small U.S. banks in Washington to lobby Congress
* Small bankers to lobby consumer bureau, Fed, FDIC
* Treasury: regulators working to strike right balance
By Rachelle Younglai
WASHINGTON, May 2 A key Republican lawmaker on
Monday urged hundreds of tiny U.S. banks to "slay the dragons"
when they battle Congress over new limits on debit card fees
that could hurt their profits.
Speaking to the bank executives before they set out to
lobby lawmakers this week, Representative Spencer Bachus told
them the outcome of the controversial "interchange" rule was
"up to them."
"Go ye to the hill and slay the dragons," said Bachus, the
chairman of the House Financial Services Committee that is
helping to oversee the implementation of the Dodd-Frank
As required by the legislation, regulators are crafting the
"interchange" rule that will crack down on fees banks charge
merchants on debit card transactions.
The provision is detested by small banks as well as the big
card networks Visa Inc (V.N) and MasterCard Inc (MA.N) and big
Wall Street banks such as Citigroup (C.N) and JPMorgan Chase &
The Federal Reserve in December proposed capping the fees
at about 12 cents per transaction -- a 75 percent cut. At the
Fed's proposed level, the cap would cost the bank industry
about $13 billion in annual revenue, CardHub.com has said.
The law specifically exempts banks with less than $10
billion in assets from the crackdown but community bankers say
they are skeptical about how that part of the law will work in
Deputy Treasury Secretary Neal Wolin, who along with Bachus
spoke at a meeting of the Independent Community Bankers of
America, said regulators were working to strike the right
balance. "They're working to make sure that regulations protect
the system but don't hurt small banks or prevent them from
doing their job," Wolin said at the meeting.
The small banks already have an ally of sorts with Federal
Reserve Chairman Ben Bernanke, who has said the Fed will do
everything possible to keep the proposed rule from hurting
The association convened a meeting in Washington to send
their small bank executives to lobby Congress, the Fed and the
Consumer Financial Protection Bureau --- which is still being
established by the Obama administration.
(Reporting by Rachelle Younglai; editing by Leslie Adler)