Some federal regulators contend that smaller banks are shopping around for more lenient oversight after the Dodd-Frank Act changed their regulator to the Office of the Comptroller of the Currency. Bankers argue that they are seeking to work with regulators, such as state and credit union officials, who are more in touch with the issues of smaller institutions and won't punish them for the sins of bigger banks. "We are dealing with a false perception that the OCC doesn't understand community banks," said Jennifer Kelly, the agency's senior deputy comptroller for midsize bank supervision.

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