As the 119th Congress begins, significant legislative shifts driven by leadership changes and industry demands will greet the banking industry. Sen. Tim Scott, R-S.C., will serve as chairman of the Senate Banking, Housing, and Urban Affairs Committee, and Rep. French Hill, R-Ark., a former community banker, was elected to lead the House Financial Services Committee. Both promise to bring a focus different from prior committee leadership.

In early January, Scott released his priorities for the Senate Banking Committee. Under his leadership, the committee will work on legislation to promote financial inclusivity and opportunity to responsibly advance affordable housing. There will also be renewed focus on increasing access to capital for entrepreneurs and small businesses, as well as a push to expand investment opportunities for retail investors. These priorities, and others laid out by Scott, will bring a renewed examination of regulatory proposals and careful oversight of financial regulators, particularly those left from the previous administration.

Across the Capitol, in the House Financial Services Committee, Hill has promised to “make community banking great again” and recently laid out a set of principles that he will adhere to as chair of the committee. These principles include regulatory fairness, regulator transparency, and rightsizing; promoting a healthy banking industry for institutions of all sizes; and improving access to funding and capital.

Similarly, President Donald Trump, his Cabinet nominees, and others appointed to lead federal regulatory agencies will drive change in the industry. On his first day in office, Trump issued an executive order that prohibits most federal agencies from issuing proposed rules until an administration-appointed agency head reviews the regulation. Although the executive order does not expressly exclude independent agencies such as the Consumer Financial Protection Bureau (CFPB), any Trump-appointed independent agency head would be likely to follow the order. And with Republicans in control of the Senate, it is projected that any nominees who require senatorial consent will be approved. Thus, this wave of Trump-appointed administrative leadership will probably issue new interpretations and rescind Biden-era rules and policy statements, including policies or guidance on various topics affecting bankers. While current CFPB Director Rohit Chopra has yet to tender his resignation to Trump, it is no secret that Trump administration officials strongly disagree with his aggressive regulatory practices and that his days leading the agency are numbered.

As the 119th Congress moves forward and the landscape of banking regulation shifts, industry leaders will need to stay agile and adaptable. With new leadership in both the Senate Banking Committee and the House Financial Services Committee, as well as the potential for significant changes in federal regulatory agencies under the new administration, 2025 promises to be a pivotal year. The focus on financial inclusivity, community banking, and regulatory fairness will reshape how the banking sector operates and interacts with policymakers. As these changes unfold, it will be essential for industry stakeholders to closely monitor legislative developments and regulatory shifts, ensuring they are well positioned to navigate the evolving environment and continue to meet the needs of consumers, businesses, and the broader economy.