The leading lobbying group for bankers wrote Treasury Secretary Tim Geithner Friday opposing the proposed so-called "bank czar."

American Bankers Association (ABA) President Edward Yingling wrote Geithner, arguing that a single regulator for banks would disrupt the "dual banking system," by which state and federal banks face different regulations at those levels.

"The ABA is adamantly opposed to this concept because we believe it would, as a practical matter, be the end of a true dual banking system," Yingling wrote.

As the Obama administration mulls an overhaul for the U.S. banking system, the ABA also argued that the new regulator should be under the supervision of the Federal Reserve, and said that new consumer protection agency for financial services would be unnecessary.

In particular, Yingling opposed the idea that the FDIC oversee the new regulatory scheme, preferring a council of regulators chaired by the Fed instead.