By: Jake Sherman

October 12, 2010 04:34 AM EDT

An all-out assault on government-sponsored loan enterprises, increased oversight of regulatory agencies and retooling the Wall Street regulatory overhaul are on tap if the Republicans retake the House.

GOP lawmakers — looking forward cautiously at leading the House Financial Services Committee in a Republican majority — are planning a slew of hearings delving into past practices and potential changes to Fannie Mae and Freddie Mac, the two federally backed lenders that many consider to be a root cause of the housing meltdown.

Leading Republicans on the committee — including California Rep. Ed Royce, Texas Rep. Jeb Hensarling and New Jersey Rep. Scott Garrett — also say the panel will significantly ramp up oversight of agencies like the Securities and Exchange Commission in the wake of Democratic financial services overhaul, which they believe gives the regulators too broad authority over markets.

But unlike Republicans’ pledges to repeal the health care reform law, the party is not looking to wipe off the books the financial services regulation law penned by Senate Banking Committee Chairman Chris Dodd (D-Conn.) and House Financial Services Committee Chairman Barney Frank (D-Mass.). To do that would create more uncertainty for the markets, so, instead, it will aim to defund “portions of it,” Hensarling said.

If the House majority flips, a newly revamped financial services committee is likely to begin its work soon after a Republican majority is installed. That’s because there isn’t likely to be a tussle amid the committee’s three top Republicans over who takes the gavel from Frank.

People close to House Minority Leader John Boehner (R-Ohio) have indicated that he will support the current ranking member, Alabama Rep. Spencer Bachus, and Hensarling and Garrett have signaled support for him. Royce stops short of coming out forcefully for the Alabaman, although GOP insiders say it’s unclear if he would launch an aggressive challenge to Bachus.

“I’m focused entirely on getting the majority in the House,” Royce said in an interview with POLITICO. “Unless we do, Barney Frank is the chairman. And I believe that we need different leadership than the leadership that Chairman Frank has given to the committee. But I’m going to focus after the election on these other questions, in terms of any position in the House.”

Bachus was not available for an interview by POLITICO, but he issued a statement saying, “We have not conducted any meaningful oversight” under Democratic leadership.

“The administration will no longer receive a pass when it comes to aggressive oversight of their failed economic policies, and that includes extensive review of all the job-killing provisions in [the Dodd-Frank Wall Street Reform and Consumer Protection Act],” he added.

The next two years in Washington are sure to be crucial for Wall Street. Much is still unknown about financial services regulation and how it will affect consumers, banks and financial markets. Should Republicans take over, huge slices of the recently passed legislation are sure to be tinkered with, although dramatic change isn’t likely with President Barack Obama in the White House.

Republicans also say they’d take a hard look at the regulations already put in place.

“If in doubt, let freedom ring,” Hensarling said. “I put the burden on regulators to tell me why they’re doing what they’re doing.”

While Republicans are anxious to rewrite portions of the Obama administration’s reforms, they were notably quiet about the action they’d take in their own much-touted “Pledge to America,” which promises to end bailouts and cancel the Troubled Asset Relief Program.

A robust Republican overhaul is raising alarm among Democrats.

Frank, for instance, said he worries about Republicans cutting funding for such agencies as the Securities and Exchange Commission and the new Consumer Financial Protection Bureau, which is being organized by new White House appointee Elizabeth Warren, a staunch critic of Wall Street.

But Hensarling said he’s “offended, frankly, that at its core, [the new agency] assaults the liberties of the consumer and will be headed by an unelected and unconfirmed czar or czarina. It’s not her personally; it’s the position that offends me,” he added.

Republicans say that other areas of the reform law are likely to be scrutinized, but it is too early in the process to know where problems will emerge. Many Republicans, for instance, are skeptical of sections of the law that allow firms to be designated as “too big to fail.”

Beyond the reform law, Republicans said winding down Fannie Mae and Freddie Mac — and reshaping the two lending giants — will be among their most difficult challenges.

“It took many years for this mess to be created, and we need to be very thoughtful and careful in how we restructure it and put forward a new proposal for a solid foundation for housing and job creation,” Royce said in an interview with POLITICO. “First, there should not be private-sector profits and taxpayer losses. That led to the moral hazard problem in the first place.”

K Street sees Republican control of the committee as being significant in two areas: government-sponsored enterprise reform and oversight. A top industry lobbyist, granted anonymity to talk candidly about the sector he lobbies, said Fannie and Freddie are “far less of a sacred cow for Republicans” and described a more aggressive hearing schedule that would clamp down tighter on regulatory agencies as new rules come into effect.