The nation's top banking industry group warned the White House this week that President Obama's Wall Street reform law has led to the destruction of community banks around the country, and pushed back against a recent report from his economic advisers that defended the law.

The American Bankers Association told Obama's advisers in a letter Monday that there are 1,708 fewer banks today than when the 2010 reform was passed, representing one-fifth of the industry. That decline, ABA head Rob Nichols wrote, is "compelling evidence" that the law "had a negative impact" on community banks.

The argument over the Dodd-Frank law's effect on community banks is important because some members of Congress have cited the regulatory burden on small banks as a reason to make changes to the law, which liberals have tried to keep intact.

Hillary Clinton's presidential campaign offered some support for small banks Thursday, by unveiling a plan to ease some of the regulatory burden on small banks and claiming that community banks "struggle with unnecessary regulatory complexity." Unlike Republicans on Capitol Hill, however, Clinton also ruled out any deregulation for big banks that have been blamed for the financial crisis.

Nichols, in making the case for regulatory relief for community banks, said that talking to community bankers would reveal Dodd-Frank as the culprit. "There is simply not enough capacity to read and understand what rules apply (especially as rules are modified); implement, train, and test for compliance with those that do; and still have the time and resources to meet with individuals and businesses about their financial needs," he wrote.

Nichols noted that only three new banks have been created since past five years, compared to thousands in the wake of the 1980s S&L crisis, while other industries have seen a greater formation of new businesses.

The White House report blamed the lack of new bank creation on trends that have been going on for decades, and that predated the Dodd-Frank law.

But Nichols leaned on testimony from one banker in particular to make the case that Dodd-Frank is hurting banks, especially through new rules on home loans that have increased paperwork. The unidentified banker, from a bank in the Northeast that had to sell itself to a larger bank, said simply that "we became a victim of Dodd-Frank."