By Dave Clarke and Rachelle Younglai
WASHINGTON (Reuters) - Republicans will reopen the broad Wall Street reform law and overhaul the newly created consumer protection bureau if they regain control of Congress after the November elections, a leading lawmaker said on Monday.
Richard Shelby, the top Republican on the powerful Senate Banking Committee, said lawmakers must revisit the legislation enacted this summer, which is the broadest overhaul of financial rules since the Great Depression.
"The bill is so sweeping and such a game changer in many ways that it's incumbent upon us to revisit it," Shelby said at the Reuters Washington Summit.
The bill, one of the Obama administration's legislative victories, will impose new restrictions on every aspect of Wall Street.
But lawmakers are already trying to change the bill even though it was only signed into law in July. And that's before the November midterm elections, which could see Republicans gaining influence if not control over Congress.
The House Financial Services Committee, which oversees financial regulators, is now considering tweaks to one of the bill's provision related to the Securities and Exchange Commission.
If Democrats lose control of Congress, Republicans are sure to tear apart the contentious legislation they mostly all opposed.
"The consumer agency bothers me the most," said Shelby, who failed to reach a compromise with Democrats and voted against the bill. "I thought the creation of it and the way it was created was a mistake," he said.
Under the bill, banking regulators are stripped of their consumer supervisory duties and the new Consumer Financial Protection Bureau gains the power to write and enforce rules for mortgages, credit cards and other financial products.
"I don't believe it's good for business, it's not good for the financial sector and ultimately I don't believe it's going to be good for credit for a lot of people who need it. It's gonna cost," Shelby said.
But Sheila Bair, chairman of the Federal Deposit Insurance Corp., warned against Congress reopening the law, saying banks already face enough regulatory uncertainty.
"I think to go back and completely reopen it now with a whole other set of question marks and uncertainties about what people are supposed to be doing ... I hope people would think hard about that," Bair said at the Reuters Washington Summit.
Republicans despise the consumer bureau and have long argued that consumer protections should not trump the safety and soundness of banks. They fear that the bureau would hurt the availability of credit by burdening banks with piles of new regulations.
They were also upset with the appointment of Wall Street critic Elizabeth Warren, a Harvard professor, to help set up the consumer watchdog.
"I believe she's got a big ax to grind and she's sharpening that ax," said Shelby. "I don't think that you need somebody in a position like that with all these preconceived ideas and I believe she has a lot of them."
As the top Republican on the Senate Banking Committee, Shelby said he would first examine the bill closely to see "what's good and bad in it."
(Additional reporting by Kevin Drawbaugh; Editing by Leslie Adler)