[ by Larry Goldfarb ]

Mid-sized banks which include U.S. Bancorp. (USB), SunTrust Banks Inc. (STI), PNC Financial Services Group Inc. (PNC) and Regions Financial Corp. (RF) that mostly let Wall Street and small firms speak for the industry during the debate over the Dodd-Frank Act have decided it’s time to carve out their own agenda in Washington.They are opening their own lobbying shops and staffing them with seasoned Washington hands.

Regional banks tend to have more than $50 billion in assets, mostly in commercial and retail loans rather than complex investment banking products. Their size is well short of a Wells Fargo & Co. (WFC), which is 20 times larger with assets of more than $1 trillion. Most have a distinct geographical footprint, like Regions in the South. There are about a dozen such firms in the U.S. who have become active in Washington.
Lobby Expenses

 “There was this view on the Hill that you were either a small community bank or a mega-bank,” Smith, of Regions, said in an interview. “We felt like the middle child.”

Despite the new lobbying firepower, the regional banks have limited room for change when it comes to Dodd-Frank rules. The law specifies that institutions with more than $50 billion in assets are subject to the most stringent requirements, a threshold exceeded by most of the firms.

What the regional firms can do is ask regulators to account for differences among banks when they write the details. These differences are reflected in the banks’ concern about:

• Living Wills. A law that requires companies designated as systemically important to draw up “living wills,” blueprints for how they could be dismantled in an orderly way if they neared insolvency.  The rule does not appear relevant to regional banks. 
• Volker Rule. The regional banks said the Volcker proposal would require them to set up expensive compliance programs even though they don’t engage in the risky trading the rule prohibits.
• Swap-trading rules and pending requirements for capital buffers under the international Basel agreement.

Representative Barney Frank, the Massachusetts Democrat who was then head of the House Financial Services Committee, said that was basically true during the debate on the law. “I don’t remember hearing from them at all,” Frank said in an interview. “And it would have mattered.”  Frank said the regulators have the flexibility to reduce compliance costs on regional banks. “They are assuming the regulators are stupid or hostile, and I don’t think they are hostile,” Frank said.

For further details, go to:  [Bloomberg, 11/2/12].