Rising competition from larger lenders and regulatory pressure is hurting small banks across the United States, two Federal Reserve officials said on Tuesday.
Fed board member Jerome Powell said the central bank is committed to making sure the Fed understands the challenges faced by community banks. He added that he will conduct a nationwide webinar with community bankers next month.
"The burden of regulatory compliance can be particularly daunting for small banks," he said, speaking at a St. Louis Federal Reserve Bank conference on community banking.
The Federal Reserve's complex financial reform effort is strapping a heavy burden on small banks across the United States, a Fed official said on Tuesday, with regulations badly impacting customers across the country.
Kansas City Fed President Esther George, who has been advocating for the central bank to move more quickly in raising interest rates, took aim at the Fed's reliance on rules that were meant for large investment banks.
"Community banks are not smaller versions of the country's largest banks," she said in prepared remarks for a St. Louis Reserve Bank conference on community banking.
George did not comment on U.S. monetary policy or the economic outlook in her prepared remarks. The speech focused on the need for the Federal Reserve to ease its regulatory grip on the nation's community banks.
—By Reuters. CNBC contributed to this report.