By Emily Stephenson
WASHINGTON (Reuters) - Lawmakers in the U.S. House of Representatives on Wednesday approved a bill scaling back the 2010 Wall Street financial reforms, an early victory that could embolden Republicans to continue chipping away at the oversight law.
House Republicans view much of the Dodd-Frank law as unworkable and an unnecessary burden on American businesses, while many Democrats have vowed to defend it. In a mostly party-line vote of 271 to 154, lawmakers voted to send the measure to the U.S. Senate.
The bill would give banks extra time to comply with part of the law's controversial Volcker rule and loosen disclosure requirements for small companies seeking to raise capital, among other changes.
"The community banks and the Main Street businesses that are trying to put America back to work are suffering under the sheer weight, load, volume, complexity and cost of the regulatory burden that has been imposed," said House Financial Services Committee Chairman Jeb Hensarling, a Republican.
Republicans control both houses of the U.S. Congress after major wins in last November's elections, and they have made it a top priority to reduce what they view as a burden on business due to federal regulation.
The House on Tuesday approved a bill that creates extra hurdles for agencies writing new rules.
The Dodd-Frank law is a top target. Republicans brought up the financial regulation bill after returning to Washington last week. They tried to move it quickly under special rules that required two-thirds of the House's approval, but Democrats defeated that plan.
On Wednesday, supporters, including 29 Democrats, approved the bill under normal rules that required fewer votes. It is unclear whether it would pass in the Senate, where Republicans hold a slimmer majority than in the House.
The bill's most controversial portion relates to the Volcker rule, which bans banks from making risky trades with their own money and restricts certain types of investments.
The bill gives banks two more years to comply with a section related to collateralized loan obligations, or bundles of business loans. Banks said they would have to dump investments, disrupting the market, if the rules were not changed.
President Barack Obama has threatened to veto the bill if it reaches his desk.
(Reporting by Emily Stephenson; Editing by Susan Heavey and Paul Simao)