Since it was signed into federal law by former President Barrack Obama in July 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) has attracted much debate about its effectiveness and its impact on small- to mid-sized banks. Opponents of the law believe that it has stifled the growth of smaller banks and negatively impacted the communities that such banks support. (See also: How Do Financial Regulations Affect Smaller Banks?)

In May 2018, President Trump made good on his election promise to overhaul the Dodd-Frank banking legislation by signing reforms passed by the House of Representatives. Among other points, the rollback increases the threshold under which banks are deemed "too big to fail."

Under Dodd-Frank, banks with a market capitalization over $50 billion had to undergo stress tests, which measured their ability to weather a financial downturn. The threshold for such testing has raised to $250 billion, which effectively removes regional banks from having to meet this requirement. Smaller financial institutions will also now be exempt from some loan data reporting requirements that critics of the law say restricted the flow of credit to many Americans. 

As a result of the rollbacks, many investors see new profit potential in small and mid-sized banks. Those looking for exposure to regional banks should consider investing in one of these three exchange-traded funds (ETFs).

(See more: What are Key Government Regulations that Affect Investing in the Banking Sector?)

SPDR S&P Regional Banking ETF (NYSEARCA: KRE)

Formed in 2006, the SPDR S&P Regional Banking ETF seeks to provide a similar return to the Standard & Poor's (S&P) Regional Banks Select Industry Index. The fund attempts to achieve this by investing at least 80% of its assets in securities that make up the underlying index. KRE’s portfolio consists entirely of U.S. regional small- and mid-cap banking stocks. Prominent holdings include SVB Financial Group (NASDAQ: SIVB), Zions Bancorp. (NASDAQ: ZION) and BB&T Corp. (NYSE: BBT).

The SPDR S&P Regional Banking ETF is the largest U.S. regional banking fund with $5.07 billion under management. Investors pay an annual fee of 0.35%, which is lower than the 0.41% category average. As of June 2018, the ETF has a five-year annualized return of 15.9% and a three-year annualized return of 16.39%. Year to date (YTD), the fund has returned 7.7%.

iShares U.S. Regional Banks ETF (NYSEARCA: IAT)

The iShares U.S. Regional Banks ETF launched in 2006 and tracks the Dow Jones U.S. Select Regional Banks Index. The fund invests the majority of its assets under management (AUM) in stocks and depositary receipts that comprise the benchmark index. Like KRE, the fund focuses on small- and mid-cap U.S. regional banking stocks. The ETF is heavily concentrated, with its top five holdings accounting for 41.83% of the portfolio; U.S. Bancorp (NYSE: USB) and PNC Financial Services Group Inc. (NYSE: PNC) alone have a combined weighting of 24.94%.

The iShares U.S. Regional Banks ETF has an expense ratio of 0.44%, making it more expensive than KRE. The fund has $927.86 in AUM and pays a 1.57% dividend yield. As of June 2018, this above-average-risk rated ETF has three- and five-year annualized returns of 15.24% and 14.55%, respectively. Over the past year, it has returned an impressive 19.26%.

PowerShares KBW Regional Banking Portfolio ETF (NASDAQ: KBWR)

Launched in 2011, the PowerShares KBW Regional Banking Portfolio seeks to track the performance of the KBW Nasdaq Regional Banking Index. The fund does this by investing the majority of its AUM in U.S. regional banking stocks. KBWR's portfolio, which holds 50 stocks, has an 80% / 20% split between mid- and small-cap companies. Weightings are spread equally across the ETF’s portfolio, with no holding accounting for more than 5%. Key stocks in the fund include East West Bancorp Inc. (NYSE: EWBC), Cullen/Frost Bankers Inc. (NYSE: CFR), Signature Bank (NASDAQ: SBNY), PacWest Bancorp (NASDAQ: PACW) and Bank of the Ozarks (NASDAQ: OZRK). (See also: Small Stocks for Value, Yield and Takeover Potential.)

The PowerShares KBW Regional Banking Portfolio charges investors an annual fee of 0.35%. Assets under management of just $191.67 million make this fund much smaller than KRE and IAT, and can sometimes lead to wide spreads. As of June 2018, this high-risk-rated fund is trading at $59.95, near the high of its 52-week range between $47.64 and $61.23. It has returned 7.33% YTD and pays a 1.65% dividend yield.