Republicans say they are ready to allow financial overhaul bill to be debated in Senate

GOP poised to abandon stall of banking bill

WASHINGTON — Republicans set the stage Wednesday for removing their blockade against legislation to tighten regulations on Wall Street, saying they still hope to change the bill on the Senate floor after reaching an impasse on consumer protection.

The end in talks comes after Sen. Richard Shelby, the top Republican on the Senate Banking Committee, received assurances that Democrats will adjust the bill to address GOP concerns that it would perpetuate bailouts of banks.

But Shelby said he and Banking committee chairman Christopher Dodd could no longer find common ground on other provisions of the bill, including Dodd’s consumer protection language that Republicans say goes too far.

“Now that those bipartisan negotiations have ended, it is my hope that the majority’s avowed interest in improving this legislation on the Senate floor is genuine and the partisan gamesmanship is over,” Senate Republican Leader Mitch McConnell said.

Shelby said that in blocking the bill Republicans had given him time to address the bailout questions. He said he would now “defer to their individual judgments on whether the Senate begins a floor debate on this bill.”

Dodd said he and Shelby had been engaged in productive talks. “But I cannot agree to his desire to weaken consumer protections given the enormous abuses we have seen.”

Democrats tried three times to begin debate on the bill only to be thwarted by Republican opposition. Democrats branded the Republicans as Wall Street allies. But Republicans said they were merely trying to secure changes to make the bill more bipartisan.

Republicans had already begun to drop their complaints that the Democrats’ legislation would perpetuate bailouts, and had shifted their criticism to a consumer protection provision that they say goes too far.

The Senate Democrats’ bill would create a Consumer Financial Protection Bureau within the Federal Reserve that would have power to police transactions between institutions that provide financial services and their customers.

Republicans say the bill would have unintended circumstances that could ensnare small business people for merely extending credit to their customers.

By a 56-42 vote Wednesday, Democrats failed for the third time to get the necessary 60 votes to move the legislation to the Senate floor for debate. Democrats had threatened to keep the Senate in session into the night and were preparing to hold more votes testing Republican unity.