WASHINGTON — Propelled by its enlarged Republican majority, the House has moved to ease a landmark law reining in banks and Wall Street, more than six years after a financial crisis brought on the Great Recession.
The vote was 271-154 on legislation that advanced a key priority of the Republicans. Approval of the bill came swiftly in the second week of the new Congress despite a veto threat from the Obama White House. The measure now goes to the Senate, where it will face strong opposition from liberal Democrats such as Massachusetts Sen. Elizabeth Warren.
The legislation in the House bypassed the customary slog of committee work and revisions. It probably won't move through the Senate as quickly. While the Republicans now control the Senate as a result of November's elections, GOP senators would be more likely to work on compromises with their Democratic colleagues and to put the legislation through a process of hearings and debate.
In the House, 29 of 188 Democrats joined the near-unanimous 242 Republicans to vote for the measure.
The bill alters sections of the 2010 Dodd-Frank financial overhaul. That law had tightened government oversight of banks and financial markets with an eye toward preventing another crisis and another taxpayer bailout of banks. At the height of the financial crisis in late 2008, the government stepped in to rescue crippled banks — including the largest Wall Street institutions — with hundreds of billions of dollars in taxpayer money.
Most notably, the measure passed Wednesday would give U.S. banks two extra years — until 2019 — to ensure that their holdings of certain complex and risky securities don't put them out of compliance with a new banking rule.
Some Senate Democrats began raising objections Wednesday as the House acted.
Sen. Sherrod Brown of Ohio, the new senior Democrat on the Senate Banking Committee, called the bill "another attempt by House Republicans to advance Wall Street's interests at the expense of the American people."
"Rolling back protections that safeguard against practices that nearly crippled our economy creates unnecessary risks for taxpayers and investors," Brown said in a statement. He will work with Banking Committee Chairman Sen. Richard Shelby, R-Ala., on legislation related to banking and financial regulation. Warren also is a member of that panel.
Republican proponents insisted the new legislation would reduce the regulatory burden on small businesses and spur creation of new jobs.
The business lobby was heartened by the House action and already looking toward additional changes in the Dodd-Frank law. In a speech, U.S. Chamber of Commerce President Thomas Donohue cited the Financial Stability Oversight Council and the Consumer Financial Protection Bureau — two federal bodies created by the 2010 law — as needing changes and curbs to their authority.
"We're not out to repeal Dodd-Frank. What we're interested in doing is making technical changes" to it, Donohue said in response to questions.
The House bill revises the so-called Volcker rule, a key part of the financial overhaul law, which would limit banks' riskiest trading bets. That kind of risk-taking on Wall Street helped trigger the 2008 crisis.
Republicans in the House have been trying for years to chip away at the Dodd-Frank law, which Congress enacted with mostly Democratic support to tighten regulation. Republicans have denounced the law as an excessive expansion of regulatory authority that's stifling the competitiveness of the financial industry.
The White House issued a veto threat Monday, saying the bill "would weaken and undermine" the Dodd-Frank law. Referring to the proposed two-year delay for certain securities under the Volcker rule, the White House said in a statement, "taxpayers should not have to wait that long to have limits in place that protect them from risky practices."
The Federal Reserve in April gave banks until July 2017 to sell off their holdings of so-called collateralized loan obligations, which are mainly backed by commercial loans to higher-risk companies. That came atop a previous one-year extension by the Federal Reserve, to July 2015.
The rule is named for Paul Volcker, a former Federal Reserve Board chairman who was an adviser to President Barack Obama during the financial crisis. Volcker urged a ban on high-risk trading by big banks to diminish the likelihood that taxpayers might have to rescue them again.
Associated Press writer Matthew Daly contributed to this report.