The House on Thursday voted to undo much of the Dodd-Frank banking law passed after the 2008 financial crisis, The Associated Press and New York Times reported.
Called the Financial Choice Act, the Republican bill seeks to undo significant parts of the 2010 financial reform law.
The bill was crafted by House Financial Services Chairman Jeb Hensarling.
Republicans criticize the Dodd-Frank regulations as the primary driver for anemic economic growth in the U.S. and for enshrining too-big-to-fail, which they say paves the way for future taxpayer bailouts of the country's biggest banks.
On Wednesday, House Speaker Paul Ryan told reporters Hensarling's bill would keep the GOP's promise to cut onerous financial regulations in order to help create jobs and foster economic growth.
"We see the Financial Choice Act as the crown jewel of this effort," Ryan said at a press conference. "The Dodd-Frank Act has had a lot of bad consequences for our economy, but most of all in the small communities across our country."
Hensarling's bill would give the president the power to fire the heads of the Consumer Financial Protection Bureau, a consumer watchdog agency created under Dodd-Frank, and the Federal Housing Finance Agency, which oversees mortgage giants Fannie Mae and Freddie Mac, at any time for any -- or no -- reason.
It also gives Congress purview over the CFPB's budget, meaning lawmakers could defund the agency entirely.
The GOP proposal would also bar the Federal Deposit Insurance Corp. from overseeing the so-called living will process, which requires banks to write up plans on how they would safely be unwound in the event of a collapse. The FDIC and the Fed are the two regulators responsible for overseeing this requirement under the 2010 law.
Democrats objected to the bill calling it the "Wrong Choice Act." They say it would return the country to the "regulatory Stone Age" and be a disaster for the U.S. financial system.
"We are putting taxpayers again in harm's way," said New York Democrat Carolyn Maloney, speaking on the House floor on Wednesday.
Minority lawmakers also argue Hensarling's bill would gut consumer protections and allow banks to make risky investments that required taxpayers to come to the rescue of the nation's largest financial institutions almost a decade earlier.
In an editorial posted on Medium this week, Maxine Waters, the top Democrat on the House panel, said "Donald Trump and Republicans want to go back to the bad old days and lead all of us down the road to another financial crisis."
The bill's destiny is now in the hands of the Senate.
Senate Republicans will likely seek to craft their own companion measure to overhaul the Dodd-Frank regulations.