Oct. 26 (Bloomberg) -- A top American Bankers Association official defended the group’s members against demonstrators massing in Chicago to protest the industry’s opposition to proposed regulations in response to the financial crisis.

“A lot of people lost their jobs, and they are very frustrated and they’re very angry,” Bob Schmermund, executive vice president of ABA membership, told bankers today. “What the protesters may not realize is who’s attending this meeting. This room is literally filled from stem to stern with traditional bankers whose life’s work is dedicated to serving the needs of their communities.”

Schmermund told the attendees at the annual convention that conference organizers would “make sure that your experience is safe and enjoyable.”

“If there is a disturbance this morning, or at any time, please stay seated, remain calm and we will restore order,” he said at the start of today’s first conference session.

Protest leaders have vowed to bring thousands of demonstrators for a prayer vigil tomorrow followed by a march to the bankers’ convention.

The protesters, after rallying outside the hotel yesterday evening, returned today with signs reading “Reclaim America,” “Bust Up Big Banks” and “Hold Banks Accountable.” They also carried cardboard cutouts of JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon, Wells Fargo & Co. CEO John Stumpf and departing Bank of America Corp. CEO Kenneth Lewis holding money bags.

‘Showdown in Chicago’

“The same banks that created the foreclosure crisis, sent the economy south, needed bailouts and bonuses are now lobbying to kill common-sense reforms that will protect everyday people,” George Goehl, director of National People’s Action, an organizer of the protest, said today in an interview.

The event, called the “Showdown in Chicago,” is backed by community and labor groups, including the Service Employees International Union.

Federal Deposit Insurance Corp. Chairman Sheila Bair, in Chicago to speak at the bankers’ conference, told the protesters today she supports the Obama administration’s efforts to create a Consumer Financial Protection Agency.

“I don’t know how anybody can say we’ve done a good job protecting consumers in financial services,” Bair said, citing confusing mortgages and credit-card statements. “So we need this new agency.”

Comptroller of the Currency John Dugan, the regulator of national banks, told reporters at the convention that the protest “reflects considerable concern around the country about financial issues, particularly of larger firms.”

Durbin Criticism

The bankers were criticized yesterday by U.S. Senator Richard Durbin of Illinois, the chamber’s No. 2 Democrat, who told protesters more regulation of the financial services industry is required.

“We need to ensure that the robber barons that are responsible for this recession don’t get away with creating it and then declaring themselves a dividend,” Durbin told about 700 people gathered in a Chicago hotel ballroom.

Durbin suggested the bankers get out and meet Chicago residents who have been hurt by foreclosures and mortgage fraud. He also urged more regulation of payday loan operators and criticized the financial services industry for providing political protection to them.

“These people are exploiting everybody that walks through the door,” he said.

To contact the reporters on this story: Alison Vekshin in Chicago at avekshin@bloomberg.net.; John McCormick in Chicago at jmccormick16@bloomberg.net.

Last Updated: October 26, 2009 15:20 EDT