Pending hedge fund regulations in the European Union are “protectionist [and] discriminate against U.S. firms and activities,” Sen. Charles Schumer (D-N.Y.) said in a letter to Treasury Secretary Timothy Geithner.

Schumer’s letter said if the law is enacted, he will ask Congress to pass a law prohibiting "funds that are not headquartered in the U.S. from marketing and raising money here and require all funds operating in the U.S. to use only U.S.-headquartered custodian banks. Just as EU-based funds and custodian banks currently have full access to our market, U.S.-based funds and custodian banks should similarly not arbitrarily be denied access to the European market.”

In an interview with The Wall Street Journal, Schumer stressed, “ Reciprocity has to be the watchword here. We hope that Germany and France [which proposed the hedge fund regulations in the EU] will see how serious we are.”

Geithner recently set a letter of his own to the European Commission blasting the pending rules as protectionist.