The ICBA’s analysis of the 2024 election results outlines how unified Republican control of Congress, combined with President Trump’s return to the White House, will reshape the policy landscape for community banks. This shift opens new possibilities for regulatory relief while presenting some unique challenges.
Key Leadership Changes
Congressional Leadership
- New Senate Majority Leader John Thune (R-S.D.) succeeds McConnell after the November 13 leadership vote
- House Speaker Mike Johnson (R-La.) positioned to advance Republican priorities
- Senate confirmation of cabinet and agency appointments likely to dominate Q1 2025
The selection of Thune, known for his pragmatic leadership style and deep understanding of Senate procedure, suggests a focus on achievable legislative goals while leveraging reconciliation for significant reforms.
Senate Banking Committee:
- Chairman: Tim Scott (R-SC)
- Democratic Ranking Member TBD following Brown’s defeat
- At least three Democratic committee slots to be filled
House Financial Services Committee:
Republican Chairman contest between
- Rep. French Hill (R-Ark.)
- Rep. Andy Barr (R-Ky.)
- Rep. Bill Huizenga (R-Mich.)
- Rep. Frank Lucas (R-Okla.)
Policy Opportunities
Republican control creates several opportunities identified by ICBA:
Deregulatory Agenda
- Potential use of reconciliation process for major reforms
- Relief from Dodd-Frank Act Section 1071 (small business credit application data)
- Increases in various bank regulatory thresholds
- Support for minority depository institutions (MDIs)
Tax Policy
- Extension of 2017 Tax Cuts and Jobs Act provisions
- Preservation of 20% deduction for Subchapter S income
- Maintenance of 21% corporate rate
- Potential ACRE Act advancement
Competitive Protection
- Legislative path for addressing ILC loophole
- Enhanced oversight of non-bank competitors
Areas to Watch
Despite unified control, ICBA highlights several key areas to monitor:
Crypto and Fintech Policy
- Republican focus on limiting SEC and Federal Reserve oversight
- Shift toward CFTC and state-level regulation
- Industry push for market structure and stablecoin proposals
- Potential expansion of non-bank financial services
Agency Leadership
- FDIC Chair Gruenberg has announced he will retire in January
- The potential leadership replacement of the OCC, CFPB, SEC, and FHFA
- The Federal Reserve chair, while not subject to Presidential removal, has its own drama
- In general, new regulatory interpretation and enforcement priorities
Agricultural Policy
- John Boozman (R-Ark.) to chair Senate Agriculture Committee
- Glenn Thompson (R-Pa.) to lead House Agriculture Committee
- Focus on commodity prices and crop insurance
- USDA guaranteed loan program enhancements
Legislative Process
With Majority Leader Thune at the helm, several likely factors that will influence legislation:
- Strategic use of reconciliation process for major reforms
- Focus on achievable victories despite reduced number of Senate moderates
- Balanced approach between executive actions and legislative solutions
- Streamlined process for regulatory appointments and confirmation (see above)
Strategic Implications
Community FIs and their representing organizations should prepare for:
1. Policy Engagement
- Build relationships with new committee members
- Engage in regulatory relief discussions
- Monitor reconciliation opportunities
2. Regulatory Changes
- Prepare for leadership transitions at key agencies
- Anticipate shifts in regulatory interpretation
- Build flexible compliance frameworks
3. Competitive Landscape
- Watch non-bank expansion initiatives
- Monitor crypto/fintech regulatory developments
- Track changes in ILC regulations
Leadership changes like this suggest a coming period of dynamic policy adjustment, with opportunities for regulatory relief balanced against emerging competitive challenges.
Agility will pay off for organizations ready to take advantage of both new opportunities and competitive barriers. To quote philosopher Eric Hoffer:
In times of change, learners inherit the earth, while the learned find themselves beautifully equipped to deal with a world that no longer exists.