Small banks join overhaul debate

While the country’s biggest banks have taken much of the blame for the economic crisis, the fate of the Obama administration’s efforts to overhaul regulation of the financial industry could rest in the hands of thousands of small local banks, which have remained out of the national spotlight, according to a July 28 Washington Post article.

The country’s 8,000 community banks are a powerful lobbying force, and no one knows that better than the nation’s largest financial firms, most of which oppose the creation of an agency to oversee consumer products ranging from mortgages to credit cards. Wall Street firms might have millions of dollars to spend on Washington lobbyists and public relations campaigns, but these companies possess neither the strong reputation nor the grass-roots reach of community banks.