US President Donald Trump has promised to strip away some Dodd-Frank financial regulations and ensure they can continue giving small businesses access to capital.
Trump, joined by National Economic Council Director Gary Cohn and Treasury Secretary Steve Mnuchin, said community banks play a "vital role" in the US economy.
"Nearly half of all private sector workers are employed by small businesses. We must ensure access to capital to small businesses and for small businesses to grow. Community banks are the backbone of small business in America," Trump said on Thursday.
The session was set up to help the Trump administration craft a legislative plan to ease the regulatory burdens on small banks to try to unlock more small business lending and fuel economic growth.
Representing the industry were chief executives of nine community banks with assets of around $1 billion or less and the heads of the American Bankers Association, and the Independent Community Bankers of America.
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Bankers who attended the 45-minute meeting said they discussed the role community banks play in rural areas and provided real-world examples about the difficulties smaller banking institutions face.
ICBA, one of the industry groups in attendance, has advocated for a tiered system of regulations that tailor regulations to a bank's size, business model, complexity and risk.
Trump promised his February executive order on reducing regulation was "very powerful" and would apply to the community-banking sector.
The Trump White House largely shares the view that current "one-size-fits-all" regulations make it "very hard to remain competitive" for small banks.
"The type of regulation that you need for a $700 million bank and the risks they present are very different than those for a $200 billion bank or a $1 trillion bank," a White House official said.
Larger banks are able to spread their higher compliance costs over much bigger asset and employee bases, while smaller banks struggle with high costs and workloads.
