Overhaul to even playing field, Bernanke tells small banks

Bernanke said the hundreds of community banks - those with assets below $10 billion - would be vital in the overall economic recovery because they were a key source of loans for small businesses.

"Although we are not yet where we would like to be, the good news is that many community banks have already been doing their part to meet the credit needs of their customers, notably including small-business customers," Bernanke said in his speech to the Independent Community Bankers of America.

He noted that smaller banks still faced challenges, including a difficult economy, continued uncertainties in real estate and other key markets, and a changing regulatory environment.

"But community banks have faced difficult times before, and the industry has remained vibrant and resilient," he said. "I am confident that community banking will successfully navigate these new challenges as well."

In response to an audience question, Bernanke said the Fed understood that Congress wanted to shield smaller banking institutions from the effect of a new law that requires large banks to trim debit-card fees. At stake is the $16 billion each year that, according to the Fed, stores must pay banks and other credit-card issuers when customers use the cards.

The Fed, which must implement a rule to put the law into effect, understands that banks with assets of less than $10 billion should be protected from losing the fees they now receive, Bernanke said.