Cutting corporate tax rates helps banks
Since the November elections, many bank stocks have shot up 20%-30% in the "Trump Bump." Leaders at banks of all sizes are anticipating much needed regulatory reform, rolling back of the Dodd-Frank Act or at least its harshest provisions, and cuts in the corporate tax rate.
But if Congress's struggle to agree on big issues like how to deal with health care tells us anything, it is that dealing with the mammoth Dodd-Frank Act will also be challenging and may not come as quickly as the industry hopes.
However, there is momentum gaining for tax reform, and cutting corporate tax rates from 35% to 15%. "This would be the first win towards leveling the playing field with credit unions in years," noted FOTB Executive Committee member Guy Williams, who is also president and CEO of Gulf Coast Bank and Trust.
For community banks, a tax cut "amounts to savings that can get reinvested or used to immediately boost profits," said Sam Pappas, president and CEO of Mystic
Asset Management Inc.
"While nothing is easy," notes Christopher Probyn, chief economist at State Street Global Advisors, "simplifying corporate taxes appears to be where Congress, Trump and business align in priority. The necessary support is there."
Friends of Traditional Banking leadership and members will be watching Congress closely to see if they can help deliver.