By Patrick Rucker and Sarah N. Lynch
WASHINGTON (Reuters) - The Republican leader of the House Financial Services Committee plans to scale back banking reforms, curb the consumer finance agency and ease regulations on financial institutions and companies looking to raise capital, according to a proposal seen by Reuters on Thursday.
In a four-page memo on the legislation he intends to introduce, Texas Representative Jeb Hensarling made a slew of proposals, including one that Wall Street banks' "stress tests" be performed every two years instead of annually as is done now.
He also said he would have the position of director of the controversial Consumer Financial Protection Bureau changed from its current protected status to a political appointment removable "at will" by the president under another change.
The memo, seen by Reuters, outlined dozens of changes to the Financial Choice Act that Hensarling introduced last year and plans to reintroduce. His new bill is expected to pass the House of Representatives, but faces an uncertain fate in the Senate, where it will require 60 votes to pass.
The memo does not mention the Volcker rule, which limits bank's ability to make speculative investments in banks' own accounts.
His original bill would have killed the Volcker rule. Its absence in the memo, which details his changes to the original bill, suggests he will again propose to eliminate that rule.
"It's very aggressive and a very good starting point to rolling back a lot of the rules and regulations," said Paul Merski of the Independent Community Bankers of America.
Besides rewriting lending rules, Hensarling's Choice Act would add more hurdles to the U.S. Securities and Exchange Commission enforcement program.
The bill would also scale back a variety of rules for public companies, including some accounting and capital raising rules. It would also reduce regulations for credit rating agencies.
(Additional reporting by Amanda Becker and Sarah Lynch. Editing by Cynthia Osterman)