Why It Matters
Banking regulation is undergoing a fundamental reset in 2025-2026, creating an exceptionally favorable environment for regional and community banks like Hilltop Holdings. Federal banking agencies have lowered capital requirements, eliminated restrictive "debanking" policies, and accelerated new bank charter approvals. Congress is advancing legislation supporting these changes—from the Promoting New Bank Formation Act to the Fair Access to Banking Act.
By the Numbers
Hilltop Holdings Inc. paid PACE LLP $80,000 in final quarter 2025 to lobby on "General Banking Issues." Hilltop has worked exclusively with PACE since 2017, accumulating nearly $2.8 million across 36 quarterly disclosures.
Scott H. Lane has managed the account since inception. His portfolio includes major clients like Clean Energy Fuels Corp. and Honda North America Inc., providing broad network access.
The Agenda
Hilltop’s current focus aligns with major congressional efforts to reshape banking regulation. Key legislative priorities include the Promoting New Bank Formation Act of 2025, which eases capital standards for new banks, and the Fair Access to Banking Act, which restricts financial institutions from denying services based on reputational risk. The TAILOR Act of 2025 would require regulators to tailor rules based on bank risk profiles.
Broader Context
Congress is engineering a dramatic shift in banking regulation. Federal banking agencies have fundamentally reset U.S. banking regulation, moving away from compliance-heavy oversight toward material financial risk assessment.
Key developments include:
- New Bank Formation: The OCC received 14 de novo charter applications in 2025, nearly matching four prior years combined
- Community Bank Relief: Federal agencies proposed lowering the Community Bank Leverage Ratio from 9 percent to 8 percent
- Debanking Restrictions: The OCC and FDIC proposed rules prohibiting agencies from instructing banks to terminate business based on reputation risk
- Digital Asset Opportunity: Congress enacted the GENIUS Act in July 2025, creating the first federal stablecoin framework
Between The Lines
The House Financial Services Committee held hearings on "Enhancing Competition: Shaping the Future of Bank Mergers and De Novo Formation" and "Make Community Banking Great Again." The Senate Banking Committee examined debanking in hearings on "Ensuring Fair Access to Banking" and capital requirements in "Right-Sizing the U.S. Bank Capital Framework."
Rep. French Hill (R-AR-2) has championed "Right-Sizing Financial Regulation," while Sen. Elizabeth Warren (D-MA) warns some relief bills could create regulatory loopholes.
Competitive Landscape
Hilltop operates within a crowded field of financial institutions advocating on identical issues. Wells Fargo & Co. is lobbying on banking supervision and mortgage finance, while First-Citizens Bank & Trust Co. has engaged specifically on the TAILOR Act of 2025 and Bank Failure Prevention Act of 2025. This convergence suggests industry alignment on reducing compliance burden and promoting new bank formation.
The Bottom Line
Hilltop Holdings Inc. is maintaining its exclusive lobbying relationship with PACE LLP as Congress pursues sweeping banking deregulation. The timing is strategic: Congress is actively advancing legislation to reduce regulatory burden on regional banks, ease new bank formation, prevent "debanking," and streamline merger processes.
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