Small and midsize regional banks have fallen behind their larger counterparts lately, due to tumbling deposits and decreased lending. One of the main hurdles has been the Dodd-Frank legislation that was born out of the 2008 financial crisis, and put strong federal oversight on most financial institutions. However, things are about to get better for the regionals.

New legislation awaiting President Trump’s signature will include breaks for smaller banks that essentially eliminates the designation of systemically important financial institution for all but the biggest banks, by raising the threshold for that classification from $50 billion to $250 billion in assets. The Economic Growth, Regulatory Relief and Consumer Protection Act, will leave fewer than 10 big banks in the United States subject to stricter federal oversight. The bill also gives regulators more discretion in deciding when to require stress tests of capital adequacy in the event of another crisis . . .

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