Bank investors hoping financial deregulation will open the door for a new golden era of banking in the near future will likely have to be patient and keep expectations in check.

Material changes to banking regulations will not be implemented for at least 12 more months, Height Securities analyst Edwin Groshans says. Even then, Republicans will likely not get all the changes they want.

Repeal, Replace

Despite the fact that President Trump and Republicans in Congress would like to repeal and replace the Dodd-Frank Act with their own set of financial regulations, the regulators themselves will likely be responsible for any major changes for the time being.

“There have been many regulatory topics that Republicans want to change, but the reality is that Republicans lack sufficient votes to either repeal DFA or amend issues that are important to Democrats,” Groshans says.

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Senate Minority Leader Chuck Schumer recently stated bluntly that Democrats “are not going to roll back Dodd-Frank,” which was implemented to protect Americans from the type of irresponsible banking that lead to the financial crisis of 2008.

The Volcker Rule, the duties of the Consumer Financial Protection Bureau and the $50 billion asset threshold to qualify as a “systemically important financial institution” are all part of the Dodd-Frank legislation and cannot be eliminated without a vote from Congress.

The structure of the CFPB and the $50 billion asset threshold are both areas in which Democrats may be willing to compromise, Groshans says.

Modifications

However, there are plenty of regulations that can be modified to some degree by regulators, without a vote from Congress.

“These include the Volcker Rule, the Comprehensive Capital and Analysis Review (CCAR) stress tests, nonbank SIFI designation process and Basel III capital requirements,” Groshans said.

One regulation that Groshans says is untouchable is likely the Durbin amendment, which lowers debit card interchange fees. Any attempt to modify the Durbin amendment would likely be met by legal action from the retail section, Groshans said.

Since Trump’s election victory, the Financial Select Sector SPDR Fund (NYSE:XLF) is up 17.7 percent.