The thousands of community banks have often said their much larger counterparts have trampled on them. Now some hope the latest Wall Street scandal could give them ammunition to strike back.
Big banks' alleged manipulation of interest rates has become the subject of a deepening global investigation by regulators. It has also led one small bank in Wisconsin to file a lawsuit accusing JPMorgan Chase & Co , Bank of America Corp , Citigroup Inc and other major banks of colluding to set rates artificially low.
The Community Bank & Trust of Sheboygan — a town on the shores of Lake Michigan about 60 miles north of Milwaukee — is claiming manipulation of the benchmark London interbank offered rate, commonly known as Libor, has kept its interest margins artificially low.
Determined in London by the world's biggest banks, the Libor is used to set interest rates on everything from credit cards to student loans and mortgages.
Charles Tompkins of Boston law firm Shapiro Haber & Urmy filed the lawsuit in late May on behalf of the 11-branch bank, which has assets of about $554 million. It seeks class-action status so other community banks can join the litigation.
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