(Bloomberg News) Mutual savings banks say they will have difficulty retaining capital, attracting investors and even staying afloat under a new Federal Reserve rule requiring depositors each year to approve a dividend waiver.

In short, mutual bank managers say, the new rule may make it less attractive to invest in mutual holding companies -- the entities that own the typically small, consumer-service oriented banks. That could lead to decreased capital, pressure to convert to an all-stock company and ultimately, the absorption of community-oriented mutual holding companies into big-name banks.

Mutual banks are thrifts whose majority owners are depositors and whose minority owners are public shareholders.

For decades, the former Office of Thrift Supervision allowed a mutual holding company to waive its yearly dividend -- which meant the holding company could avoid a large tax bill, provide investors assurance it could meet its income-to-dividend test and retain and attract public shareholders, who contribute real capital to the institution and receive the dividend instead.

Under the Dodd-Frank Act, the Federal Reserve now helps to govern mutual banks. Under an interim Fed rule, a mutual holding company can no longer waive the dividends it owes itself unless a majority of the bank's depositors vote to allow the waiver. The new requirement is in effect even as the Fed reviews comments on it.

In the comment letters, mutual bank managers point out that most depositors won't understand the waiver issue and will probably reject it. Ultimately, the managers warn, the dividend- waiver issue could erode their capital levels and scare away investors.