NEW YORK (TheStreet) -- The bullish case for bank stocks has taken hits from low interest rates and Justice Department penalties.

But according to TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, shares of large banks such as  Bank of America (BAC - Get Report) , Wells Fargo (WFC - Get Report) and U.S. Bancorp (USB - Get Report) are starting to trade quite well. 

The bullish price action seems like the market's way of saying that a Federal Reserve rate hike is coming in 2015, Cramer said. It's hard to believe that it won't happen now, considering GDP growth for the third quarter was revised up to 5%. 

XLF Chart
Financial Select Sector SPDR ETF XLF data by YCharts

Even a small rate hike of 25 to 50 basis points would be enough to boost the probability of these banks, said Cramer, who added that loan demand also remains "good." 

There's another catalyst that perhaps many investors are overlooking: the departure of Tony West, the former Associate Attorney General of the United States. 

West "had been the hammer" at the Justice Department, Cramer said. Now that he's gone, the large penalties that hit banks such as Bank of America and JPMorgan Chase (JPM - Get Report) may subside.

"This means that this group, which is highly undervalued vs. the rest of the market, remains a buy, and I would accelerate my buying," Cramer said, particularly in Bank of America and SunTrust Banks (STI - Get Report) , two Action Alerts PLUS holdings. 

-- Written by Bret Kenwell 

Follow @BretKenwell