WASHINGTON — Rep. Spencer Bachus was formally selected by the Republican Steering Committee on Tuesday to serve as chairman of the House Financial Services Committee next year, beating back a challenge from Rep. Ed Royce, R-Calif.

Bachus, who has served as the ranking Republican member for the past four years, had widely been expected to be tapped due to his seniority, popularity and fundraising tenacity.

Traditionally, the chairman slot goes to the most senior member of the party in power who does not have another leadership spot on another committee.

Bachus is one of the top fundraisers for the National Republican Congressional Committee, which is dedicated to electing Republicans to Congress. He also had bolstered support by vowing to enable his subcommittee chairmen to advance their agendas under his chairmanship, eliciting their backing and heading off other potential challengers for the committee gavel.

“I'll continue to give my subcommittee chairs a chance to lead on issues of their expertise. … We're going to have an inclusive approach that includes all members of the committee,” the Alabama Republican said in an interview Nov. 3.

That same day, Royce announced he was challenging Bachus. In his quest to become chairman, Royce has sought to portray himself as a stronger leader who has made the right calls in the past on critical issues, including reform of the government-sponsored enterprises.

"I have been the leading advocate for GSE reform since I joined the committee," Royce said in an interview last month. "I'm the only member in the House to offer legislation to limit the systemic risk with respect to the GSEs before the crisis occurred and I've been a leading advocate in a number of areas on this committee.”

Like many other Republicans, Bachus has pledged to put reform of the GSEs and oversight of the implementation of the Dodd-Frank Act at the top of his agenda.

"We need to transition from a government controlled mortgage market with Fannie and Freddie to a privatized market and that will be a long-term goal, weaning ourselves off taxpayer-subsidized loans…. We think they ought to be put into a liquidation process even though it will be a multiyear process," he said in his post-election day interview.

But he has also pledged to revisit provisions Republicans deem onerous in Dodd-Frank, including regulation of derivatives.

"We are going to immediately take a look page by page at the job-killing provisions in the Dodd-Frank Act," he said. "Vigorous oversight is going to be essential to make sure they don't use regulation to advance their agenda, so we are going to have a sustained effort to using oversight to keep them in check….. Not all derivatives need to be traded on the exchanges. … It's not good for manufacturing or other Main Street industries."

Bachus said that he would also like to stem the funding for the Consumer Financial Protection Bureau and overhaul its structure. Rather than a presidentially-appointed director, Bachus would like to put a commission in charge of the agency. Currently, the agency is funded by a mix of appropriations and money from the Federal Reserve Board.

"Consumer protection is important and it ought to be a bipartisan goal, but you don't need a director who has executive privilege and not subject to congressional power of the purse," he said. "You are starting an agency with $600 million without having to answer to Congress. We need to look at having a commission as opposed to a director who has a really almost carte-blanche power to make lending."