The bill has almost no chance of passing Congress this year and was immediately denounced by advocacy groups, some of whom protested outside of the New York building where Hensarling was speaking. But the proposal is serving another important purpose: Setting the terms of a debate that is expected to rage next year on whether the country's banking system is strong enough to withstand another crisis without taxpayer bailouts.

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The Republican plan takes aim at the 2010 Dodd-Frank financial reform package. Six years after it was passed, the legislation remains a controversial prescription to the ills that precipitated the financial crisis. Regulators are still putting in place thousands of pages of regulations, and the banking industry says it has spent millions of dollars to comply with its tough new rules.

Republicans have repeatedly argued that the law amounts to a micromanaging of the financial system and now appear poised to challenge key aspects of it.

"Why has Dodd-Frank failed? Because Dodd-Frank rests upon faulty principle, faulty premise and faulty policy," Hensarling (R-Tex.) told the Economic Club of New York.

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Hensarling met with presumptive Republican nominee Donald Trump Tuesday to pitch the proposal, but it is unclear whether Trump, who has previously called for "dismantling" Dodd-Frank, will support the Republican approach. "Dodd-Frank is a very negative force, which has developed a very bad name," Trump said in an interview with Reuters last month. A Trump spokesperson did not immediately respond to a request for comment.

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Congress is unlikely to take up such complex legislation before the presidential election, and President Obama would surely oppose any effort to weaken one of his signature accomplishments.

Josh Earnest, the White House press secretary, addressed the Hensarling proposal this afternoon.

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"Financial industry reform essentially guarantees that taxpayers will not be on the hook for bailing out big banks if their risky bets go south," Earnest said. "But if you tear it down, like House Republicans say that they want to do, that will allow big banks to go back making risky bets and put taxpayers on the hook once again for bailing out those banks to prevent a second Great Depression. That doesn’t make any sense."

Also, Wall Street did not rush to support the proposal and has shown more interest in reviewing the effect of the rules already put in place rather than adapting to a new set of regulations.

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"We look forward to working with the committee and anyone who will help remove obstacles that make it harder for America’s banks to serve their customers and meet the needs of their local communities," said James Ballentine, executive vice president of congressional relations for the American Bankers Association.

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Under Henserling's plan, large banks could escape the new regulatory burdens by meeting tougher capital requirements. To qualify, the country's largest banks would need to raise "several hundred billion dollars" in capital to serve as a buffer during tough financial times, Hensarling said.

The proposal also calls for restructuring the Consumer Financial Protection Bureau and would remove some of its powers. Regulators would also lose the ability to designate some banks "too big to fail," triggering more rigorous regulations, under the proposal.

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The Republican proposal was criticized by Democrats and public advocates who have called for tougher regulation of Wall Street.

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Sen. Elizabeth Warren (D-Mass.) called the proposal the "wet kiss for Wall Street act."

Hensarling thinks "the poor Wall Street banks have suffered too much under the new rules and it's time for them to return to the good old days before the 2008 crisis when these banks could run wild," Warren said during a Senate Banking Committee hearing.

"Apparently Congressman Hensarling thinks that you can end too big to fail simply by stopping regulators from calling firms too big to fail. I don't think that is actually how it works."