Community Bankers Meet With Obama as Regulation Fight Heats Up .

Community bankers got their first exclusive meeting Tuesday with President Barack Obama amid an intensifying fight within the industry over legislation that would tighten federal financial regulation.

Mr. Obama used the White House parley with executives from smaller banks to reiterate his push for bankers to do more lending to small businesses. "The pendulum may have swung too far in the direction of not lending," Mr. Obama said, adding that the White House is working on ways to cut "red tape" that banks complain is making it harder to lend. He suggested the White House wouldn't intervene with federal regulators though, which many bankers complain are being too strict.

"We don't have direct influence over our independent regulators," Mr. Obama said. A top focus for the White House in the coming months will be to push for more lending, he said, and that can only be done with the cooperation of financial institutions.

But getting bankers to sing from the same hymnal won't be easy. Two bankers' groups, the American Bankers Association and the Independent Community Bankers of America, are challenging each other, and delivering competing messages on Capitol Hill as Congress weighs a wide-ranging overhaul of financial industry regulation. The ABA and ICBA both claim to speak for "community banks," but they took starkly different positions on a recent House bill. The ICBA supported it, while the ABA opposed it.

The spat among bankers promises to become nastier as the Senate takes up the bill.

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