WASHINGTON—Rep. Jeb Hensarling of Texas, the head of a House panel responsible for overseeing Wall Street and financial regulators, said Tuesday he is retiring from Congress at the end of 2018.

A conservative Republican, his record as chairman of the House Financial Services Committee has been defined by his pushing to cut the size of government more than reaching deals that can clear Congress. Many of his top policy goals have languished, in part because of a lack of Democratic support in the Senate. Those goals included...