In what is likely a preview of House Financial Services Committee Chair Jeb Hensarling’s proposals to re-do Dodd-Frank coming next Tuesday, a prominent conservative think tank is offering a wish list for changes to the law.

The American Action Forum is calling for the elimination of the Financial Stability Oversight Council (FSOC) and the Volcker Rule restricting proprietary trading by banks and regulations on financial derivatives.

In its most interesting recommendation made Wednesday, the group is asking for the merger of the Securities and Exchange Commission and the Commodity Futures Trading Commission.

The United States is the only major nation in the world that separates the regulation of securities and commodities along with financial derivatives.

Both authors of Dodd-Frank (former Connecticut Senator Chris Dodd and former Massachusetts Representative Barney Frank) have said ideally they would have combined the two agencies through the legislation, but thought it would be politically impossible because the House and Senate Agriculture Committees would not agree to give up their oversight of the CFTC.

On the establishment of the Financial Stability Oversight Council, the aim of the Dodd-Frank creators for FSOC was to create a consortium of the regulators to provide a holistic view of potential risks that could take down the financial system.  The lack of regulators to share their knowledge and cooperate has often been cited as one factor that allowed the 2008 melt down to happen.

But the forum argues MetLife and other companies have been subjected to intrusive, unnecessary regulations that hurts investors and dries up capital for infrastructure projects because the FSOC has imposed stiffer requirements on them because they are considered “systemically important.”

Another proposal is to eliminate the Office of the Comptroller of the Currency.

“The functions of the OCC could be satisfactorily replaced by adding a board member to the FDIC or another bank supervisor that would represent its interests,” the think tank said.

On derivatives, AAF said Dodd-Frank’s imposition of strict rules on swap dealers and other major swap participations is unfair and should be repealed because they did not play a significant role in creating the financial crisis.

Contending Dodd-Frank doesn’t need to be entirely replaced or repealed, AAF said it wants to keep the legislation’s stress tests for banks and higher capital requirements to make them less vulnerable to market fluctuations.

The group also applauded Dodd-Frank for giving the SEC authority to regulate credit-rating agencies.

“One might think that leading Wall Street firms, with large quantitative capabilities could and would do their own due diligence on the MBSs, CDOs, synthetic CDOs and other securities that became toxic. Not so. Instead, leading up to the crisis, credit-rating agencies erroneously rated toxic mortgage-backed securities and their derivatives as safe investments, and markets priced them accordingly,” AAF said.

The American Action Forum is led by Douglas Holtz-Eakin, who was a Republican member of the Financial Crisis Inquiry Commission and served as director of domestic and economic policy for Senator John McCain’s 2008 presidential campaign. He was also chief economist for the Council of Economic Advisers under President George W. Bush.