The world's biggest banks would win curbs on U.S. regulators' power to restrict overseas derivatives trades under legislation proposed by U.S. lawmakers.

The House Agriculture Committee will meet Thursday to consider a bill that includes a provision forcing the Commodity Futures Trading Commission to redo its policy on cross-border trades in the $700 trillion global swaps market. The measure would curtail the agency's ability to impose Dodd-Frank Act trading rules on deals conducted by employees in the U.S. but held in overseas divisions.

The provision backed by Representative K. Michael Conaway, the Texas Republican who leads the committee, is designed to reverse a CFTC policy that drew opposition from overseas regulators as well as groups representing Goldman Sachs Group Inc., JPMorgan Chase & Co. and Deutsche Bank AG. The lobby groups unsuccessfully sued to overturn the regulation.