Citigroup, JPMorgan, in Bizarre Small Bank Love Triangle: Street Whispers

NEW YORK ( TheStreet) --Independent Community Bankers of America President and CEO Camden Fine does not mince words when drawing a distinction between his members and Wall Street banks.  

"They hate us. Why do they hate us? Because, guess what?  We support the Volcker Rule. We support breaking up the Too Big To Fail Banks. My banks are treated like second class citizens. My banks are the only free market entities in the financial system because we can fail. We can succeed and we can fail, and they fail on Friday nights, but if you're on Wall Street, if you're $3 trillion in size, guess what? You can do any bonehead thing you want because the government's going to come in and bail you out," Fine said in an interview on Friday.

So it was surprising to hear Fine just a few minutes later in the same interview voice his support for the idea of JPMorgan Chase ( JPM) boss Jamie Dimon as Treasury Secretary, an idea that has provoked much public discussion as Dimon emerged as maybe the industry's top CEO in the wake of the financial crisis. That discussion died down considerably as the Occupy Wall Street movement gathered support and Dimon lost credibility when a trader at his bank known as "The London Whale" bank lost billions of dollars earlier this year making bad bets that Dimon initially called a "tempest in a teapot." Last week, however, the idea of Dimon as Treasury Secretary got new life when Berkshire Hathaway ( BRK-B) CEO Warren Buffett voiced support for the idea in an interview with Charlie Rose.

And Fine said he would be on board with Buffett's idea.

"I think he'd be an excellent Treasury Secretary, Fine said of Dimon. "He's a top drawer CEO. He's smart, he's savvy, he knows his business. He's internationally sophisticated. I don't know why Jamie would want to be Treasury Secretary, but if he were the nominee, ICBA would have no problem with that at all."  

Fine said he isn't concerned Dimon would favor the big banks ahead of Fine's members.  

"I think Jamie Dimon is a very fair-minded individual and he's a whip-smart CEO and I think he would act  in the best interests of our nation's financial system. I don't know necessarily that he would look out for us or not look out for us. I think he would do the right thing for the economy and financial system in the United States. I think he's a patriot and I think he's qualified," Fine said, adding, "I don't why he'd want the job, but if he wants the job he's certainly qualified."  

Asked if Dimon is his first choice, Fine said the ICBA doesn't have a first choice but would be happy with most of the possible Treasury Secretary candidates whose names have been surfaced in the media since the Presidential election, including White House Chief of Staff Jack Lew, possibly the most often talked about potential nominee to replace the outgoing Tim Geithner.

But at least as odd as the ICBA's endorsement of Dimon last week was hearing Citigroup executive James Garnett lobby Congress on behalf of community banks.

Speaking before the House Financial Services Committee in a hearing on the proposed capital rules known as Basel III, Garnett said the regime "poses greater operational and compliance challenges for community banks than for large banks." In fact, Garnett devoted about 10% of hid prepared testimony to defending the interests of community banks.

It is not uncommon for the big banks to use small banks for cover to promote their own agenda, as they did lobbying against lower debit card swipe fees under the Durbin Amendment. In this instance, however, Citigroup seemed to be saying it could handle tougher rules than the smaller banks.

So thoughtful of you, Citigroup, but what do you expect in return?

That's hard to say. Though ICBA Chairman-elect William Loving, President and CEO of Pendleton Community Bank, in Franklin, WV, testified at the same hearing as Citigroup's Garnett, Fine said he was entirely unaware of Garnett's kindness--even a day after the hearing. He didn't even know who Garnett was, he said.

A Citigroup spokeswoman wrote via email that "the Committee's invitation letter specifically asked Jim to address capital requirements for banks of different sizes and types in his testimony."

Okay, that's fine, bankers, but let's try and bring back the hate in the New Year.

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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