House Republicans' budget plan would gut Dodd-Frank Wall Street reform law
A trader works on the floor of the New York Stock Exchange (NYSE) on Jan. 30, 2014 in New York City (AFP)

Republican lawmakers took aim at the Dodd-Frank Wall Street reform law Tuesday, unveiling a plan that would gut regulators' authority to manage the collapse of big banks and give Congress direct control of the U.S. consumer finance bureau's budget.

The effort to repeal parts of Dodd-Frank is part of a broader fiscal 2016 budget plan released by the House of Representatives budget committee that calls for eliminating deficits and also repealing the president's signature Affordable Care Act.

The proposal, led by House Budget Committee Chairman Tom Price, pledges to make "great strides in repealing onerous policies enacted under Dodd-Frank that are hurting financial institutions both large and small."

Republicans have for years rallied against a measure in Dodd-Frank known as "orderly liquidation authority" which allows U.S. regulators to intervene in the event a large, risky bank collapses.

They have said the measure perpetuates government bailouts, and that any collapse of a large firm should be left to a bankruptcy court.

In the past, Republicans were unable to get any traction repealing the measure, largely because the U.S. Senate was controlled by Democrats.

The plan still faces major hurdles, including a likely veto from President Barack Obama if it ever reaches his desk.

Nevertheless, Republicans in the House are making a fresh push targeting bank resolution and other major Dodd-Frank provisions now that the Senate is also controlled by Republicans.

In addition to targeting resolution powers by banking regulators, the Republican budget plan also takes aim at the Consumer Financial Protection Bureau, a new regulatory agency that serves to protect consumers from predatory loan practices by credit-card and mortgage servicing companies.

The bureau's budget is not appropriated by Congress and is funded through the Federal Reserve. That has irked Republicans because it gives them less control over the regulator.

In addition to targeting the Dodd-Frank law, Tuesday's plan also calls for privatizing housing finance companies Fannie Mae and Freddie Mac, which were both seized by the government in 2008 after they nearly collapsed beneath the weight of bad loans.

"As long as they continue to enjoy federal support, taxpayers remain exposed to more than $5 trillion of outstanding commitments belonging to the firms," the plan says.

(Editing by Jonathan Oatis)