On Tuesday, the House is expected to vote on Senate-approved legislation aimed at easing post-crisis financial rules, which include a number of restrictions tied to the 2010 Dodd Frank financial-overhaul law, the Wall Street Journal reports. President Donald Trump is widely expected to sign the legislation into law as early as this week if the House advances the bill.
The updated legislation includes provision that would cut the number of banks subject to the Federal Reserve’s oversight by raising a key regulatory threshold to $250 billion in assets from $50 billion. Additionally, the bill would relax regulatory requirements for smaller financial firms that have been weighed down by the onerous post-crisis regulations.
Small-cap financial stocks and related ETFs may also benefit from the relaxed rules on smaller banks, including the First Trust NASDAQ ABA Community Bank Index Fund (NasdaqGM: QABA), PowerShares S&P SmallCap Financials Portfolio (NYSEArca: PSCF) and PowerShares KBW Regional Bank Portfolio (NYSEArca: KBWR).
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