The original proposal gave large banks a way to avoid new regulations by holding significantly more capital. It also eliminated the “Volcker Rule,” which prevents banks from using their own money to make risky bets. Those provisions appear to survive in the new version of the legislation, which is slated to be released later this month.

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A spokesman for Hensarling did not immediately return a call for comment.

Hensarling appears poised to go even further in attempting to weaken the Consumer Financial Protection Bureau (CFPB), which has been under fire from Republicans for years. The agency's rulemaking authority and enforcement powers would be limited, according to the memo, which also calls for an “elimination of consumer education functions.”

Republicans would drop their bid to have the agency run by a bipartisan commission rather than a single director. But the director could be fired “at-will” by the president, according to the memo. The CFPB is currently run as an independent agency under Richard Cordray.

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“CFPB is to be retained and re-structured as a civil law enforcement agency similar to the Federal Trade Commission, with additional restrictions on its authority,” the memo says.

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In a column in the Wall Street Journal, Hensarling called the agency “arguably the most powerful, least accountable agency in U.S. history” and proposed finding a way to strip funding from it. “The agency defines its own powers and can launch investigations without cause, imposing virtually any fine or remedy, devoid of due process,” said Hensarling, who, along with other Republicans, has called for Cordray to be fired.

A push for such broad changes to Dodd-Frank, which took the Obama administration more than a year to pass, is likely to ignite a fierce battle in Congress. Democrats have said Wall Street needs more oversight, not less.

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Rep. Maxine Waters (D-Calif.), the ranking Democrat on the Financial Services Committee, called Hensarling's plan a “disastrous blueprint” that would “destroy the protections Congress created to stop Wall Street from ripping off hardworking Americans.”

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“This new version of the Chairman's Wrong Choice Act is even worse than the original,” Waters said in a statement. “This bill makes it crystal clear that Republicans mean to disarm our consumer protections, expose the American public to financial predators, and ultimately steer us in the direction of another Great Depression.”

Hensarling is likely to have enough Republican support to get legislation through the House, but it is expected to be a tougher battle in the Senate. “The Hensarling proposal would transform the bureau from an effective watchdog into a toy poodle,” Sen. Sherrod Brown (D-Ohio), ranking Democrat on the Senate Banking Committee, said in a statement.

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