The U.S. House of Representatives is expected to pass a bill that would soften mortgage lending restrictions put in place under the Dodd-Frank Act.

Many bank executives believe the legislation will allow smaller banks to offer credit to more people and keep more loans on their balance sheet instead of selling them to secondary markets.

Ballard Spahr Partner Rich Andreano expects the reform will benefit small, rural banks and make the mortgage lending industry more profitable for smaller banks.

"I think you might see banks that were involved before [Dodd-Frank's enhanced regulations] get back in. But probably not banks that have never really had much of a mortgage business," he said.

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