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Regulatory relief's impact on bank stocks
The expectation that Congress would approve revisions to the Dodd-Frank Act has helped fuel a steady rise in bank stocks since last fall.

Now that the Economic Growth, Regulatory Relief and Consumer Protection Act, introduced in November by Sen. Mike Crapo, R-Idaho, has become a reality, there is good reason to believe that the run-up in bank stock prices will continue, analysts at Sandler O’Neill said in a research note to investors last week.

“Hoping for passage is one thing, but seeing it through is another,” analysts Scott Siefers and Brendan Nosal wrote. “Consequently, we would not be surprised to see another pop up in the group’s share prices as the market digests the bill’s actual passage.”

There are headwinds, to be sure. Recent corporate tax cuts, while great for banks’ bottom lines, have yet to boost loan demand as bankers had been predicting, and if that trend holds for another quarter or two, bank stocks could suffer.

Markets have also been rattled of late by the Trump administration’s plans to impose tariffs on a wide array of imported goods. Indeed, bank stocks were down across the board on Tuesday as fears of a trade war with China, combined with the deepening political crisis in Italy, spooked investors.

Still, the regulatory relief package signed into law by President Trump last week is a huge win for the banking industry and regional and community banks in particular. What follows is a look at how groups of bank stocks have performed since the Crapo bill was first unveiled and how these groups will benefit — or not — from regulatory relief.