President Obama met with community banking members of the American Banking Association (ABA) and the Independent Community Bankers of America (ICBA) in an attempt to reach an agreement on small business lending practices and policies.

Ease Restrictions on Small Business Lending

While President Obama said that he would do what he could to ease restrictions to lending that have made it difficult for banks to lend, he stated that he can not get in the way of federal and independent regulators. However, reaching an agreement could be difficult, as the two banking associations have taken opposite positions on a variety of issues, including the recent House bill on federal regulation.

While it is possible that this is just a way to gain consumer support on both sides of the political spectrum for the banking brands that make up the associations, this will make it difficult for President Obama to reach any compromise between the two groups.

Community Banks’ Influence

While much of the economic recovery has been focused on ensuring that the big banks remain stable, in Washington it is community banks that have the most influence, as they have a more direct connection to the constituency of lawmakers. Of the some 8,000 banks in the US, most of them are small, with assets under $10 billion, and these local banks have different agendas but great influence over what goes on on Capitol Hill.

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