Community banks could eliminate free products, fire workers and shelve expansion plans if the Federal Reserve imposes caps on proposed debit-card “swipe” fees, according to a survey conducted by a trade group, Bloomberg reported.

The caps, required by the Dodd-Frank Wall Street Reform and Consumer Protection Act, are “deeply flawed,” and an exemption for firms with less than $10 billion in assets won’t shield smaller banks from its negative effects, Independent Community Bankers of America President Camden Fine said in a statement.

Of the banks that responded to the organization’s survey, 93 percent said they would be required to charge customers for services that are currently free. Fifty percent said they would charge customers a fee each time they use a debit card.

The Federal Reserve proposed capping debit interchange fees charged to merchants at 12 cents for each transaction, replacing a formula that averages about 1 percent of the purchase price. The cap rule must be completed by April 21 and put in effect by July 21 to comply with the regulatory-overhaul law. Credit-card interchange fees, which average about 2 percent, remain untouched.

Iowa bankers have said they are concerned about placing caps on fees, and Iowa Banking Superintendent Jim Schipper said recently that it seems as if policy-makers are of a mind to re-introduce price controls on banks.

Fee limits proposed by the Federal Reserve could reduce annual revenues for U.S. banks by more than $12 billion, Bloomberg said.