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'Bank regulatory relief on steroids' could be on the way

Dodd-Frank as a whole isn't going anywhere, but significant portions of the set of banking regulations likely will be changed in the Trump administration, according to a community banking advocate.

President-elect Donald Trump pledged during the campaign to repeal the omnibus banking reform act passed in 2010 in the wake of the financial crisis.

However, most banking experts believe total repeal is virtually impossible given the sheer size of the reforms and the logistical difficulties of undoing measures that already have been implemented. Instead, they see significant parts of Dodd-Frank chipped away, in an effort to spur growth while avoiding the pitfalls that led to the crisis.

Rep. Barney Frank (R) (D-MA) and Sen. Chris Dodd (L) (D-CT) talk with each other after U.S. President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act at the Ronald Reagan Building July 21, 2010 in Washington, DC.
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Rep. Barney Frank (R) (D-MA) and Sen. Chris Dodd (L) (D-CT) talk with each other after U.S. President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act at the Ronald Reagan Building July 21, 2010 in Washington, DC.

"I think you're going to see bank regulatory relief on steroids, particularly community bank and regional bank regulatory relief," Camden Fine, president and CEO of the Independent Community Bankers of America, told CNBC.com.

Indeed, legislators this week are considering a measure that would relieve smaller banks from some regulations, by redefining which banks are considered systemically important. The current threshold for banks considered too big to fail is those with assets of $50 billion or more; under the new measure, that figure would be moved higher to exclude the regional banks that got caught in the regulatory snare.

Other portions likely to be targeted involve the controversial Consumer Financial Protection Bureau, which will be less autonomous.

However, big banks probably will continue to face curbs against excessive risk-taking.

"I think that there are some sections dealing with capital, particularly at the mega-banks, that probably should not be tinkered with or least early on should not be tinkered with," Fine said. "I do think that some of the regulations that deal with the types of mortgage loans that were floating out there ... are probably well-placed regulations, because obviously it was those types of loans that got the economy in trouble and got the banking industry in trouble."