* Frank: bills will make derivatives threat to economy
* Frank: will offer amendments to scale back bills
* Republicans: bills will help avoid unintended consequences
WASHINGTON, April 2 U.S. Representative Barney Frank said he will fight efforts by House Republicans to loosen restrictions on derivatives trading that were included in the 2010 financial oversight law that bears his name.
The full House later this month, when members return from a break, is expected to vote on two bills that would constrain regulators as they write tough new rules to regulate the $700 trillion over-the-counter derivatives market.
Frank, in a release on Monday, said the bills go too far and that Democrats will offer amendments to scale back the changes.
"Thoroughly hoping to take advantage of the fact that public attention is now focused on the budget and the healthcare bill, House Republicans are moving substantially to weaken the regulation of derivatives, which Congress adopted in 2010," Frank said in a statement.
Frank said that if changes sought by Democrats are defeated he will urge the Senate and President Barack Obama to reject the bills.
Providing more oversight and transparency to the derivatives market was a top priority for supporters of the 2010 Dodd-Frank financial oversight law.
But Republicans, banks and other financial industry groups argue that some of the reforms will have unintended consequences, including making U.S. banks less competitive with their peers in other countries.
The concerns over the derivatives provisions in the law are not limited to Republicans and both of the bills Frank opposes h a ve some Democratic support.
One of the measures expected to be voted on this month would scale back U.S. regulators' ability to oversee derivatives transactions by foreign subsidiaries of U.S. companies.
The measure received nine Democratic votes when it was approved by the House Financial Services Committee last month. However, an amendment by Frank to allow regulators to exercise oversight of these trades if they decide it would protect the U.S. financial system against excessive risk won support from all the panel's Democrats but failed to pass the full committee.
The other bill would prevent the Securities and Exchange Commission and the Commodity Futures Trading Commission from banning voice trade execution, delaying bids, or requiring a minimum number of participants to respond to price quote requests. It has the support of Democrats Carolyn Maloney, Gregory Meeks and Gwen Moore.
Regulators are struggling to quickly implement the Dodd-Frank law, which was enacted in response to the 2007-2009 financial crisis, providing an opening for opponents to seek changes before policies take effect.
Of the 222 rules that should have been completed by now, 67 have been finalized, according to a tally released on Monday by the Davis Polk law firm.