Despite persistently lower interest rates, the SPDR S&P Regional Banking ETF (NYSEArca: KRE) has outpaced QABA by over 1,600 basis points since Dodd-Frank became law. XLF has beaten the community bank ETF by almost 1,100 basis points over that time while the S&P 500 has returned 92.5% since July 21, 2010. [Finally a Breakout for Regional Bank ETFs?]
Community banks are fighting back. Small bankers have been arguing with regulators that many of the new financial rules intended for big banks are unjustly burdening community banks by impeding growth and their ability to generate a profit and lend, the Wall Street Journal reports.
Those efforts are already paying dividends. Last month, the Federal Reserve and Consumer Financial Protection Bureau moved to relax restrictions on lending and acquisitions for smaller banks. Community banks, though, contend that other areas may also need adjustments, pointing to international capital rules, additional mortgage lending relief for banks with up to $10 billion in assets and a broad exemption from enforcement by the CFPB. [Looser Bank Regulations Could Help These ETFs]
First Trust NASDAQ ABA Community Bank Index Fund
ETF Trends editorial team contributed to this post.