Republicans have dropped their objections to Democratic efforts to begin debate on a sweeping overhaul of financial regulations.
The move ended GOP tactics that had stalled the bill. Republicans said they would attempt to change the bill on the Senate floor after reaching an impasse with Democrats on efforts to compromise in private talks.
Richard Shelby, the top Republican on the Senate Banking Committee, said he had received assurances that Democrats would adjust the bill to address GOP concerns that it would perpetuate bailouts of banks.
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.
Earlier in the day, Republican senators had blocked the beginning of floor debate for a third straight day, contending they needed more time to try to work out compromises with Democrats in private talks. Republicans huddled in the late afternoon on their next step.
There had been signs that some Republicans were growing weary of continuing to block the bill after President Barack Obama and other Democrats accused them of siding with Wall Street, an institution that rivals Congress in its unpopularity.
Sen. George Voinovich, R-Ohio, said on Tuesday he would vote to let the bill advance to the Senate floor if bipartisan talks were no longer progressing.
"I have an idea of how much time it takes to cut a deal," he said. "If that's not possible, then we go on."
Sen. Sheldon Whitehouse, D-R.I., said Wednesday, "There's been immense pressure bottled up inside the Republican caucus through these last three votes. A lot of their members have been very deeply unhappy with the direction their leadership has been taking them. Better heads prevailed."
Obama, winding up a Midwest tour promoting the legislation, said he was pleased the debate would proceed.
"The time for reform is now," the president said.
The bill would establish a nine-member Financial Services Oversight Council, including the treasury secretary, Federal Reserve chairman and the heads of regulatory agencies to monitor markets for threats, such as the bubble in housing prices and mortgage-backed securities that preceded the financial collapse two years ago.
The Federal Reserve would begin policing large bank holding companies and interconnected nonbank institutions whose collapse might pose a threat to the economy. With approval of the council, the Fed could even break up complex companies that posed a grave threat.
Most investment derivatives — such as the hundreds of billions of dollars in complex instruments blamed for accelerating the crisis two years ago — would have to be traded on regulated exchanges.
Sen. Richard Shelby, the top Republican on the Banking Committee, said Wednesday he had received assurances that Democrats would adjust the bill to address GOP concerns that it would perpetuate bailouts of banks. But he said he and committee chairman Chris Dodd had given up finding common ground on other provisions, 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," said Senate Republican leader Mitch McConnell.
Republican Sen. Susan Collins of Maine said the negotiations had addressed her concerns on how to deal with financial firms deemed "too big to fail." And she said that with the Dodd-Shelby talks over she would now support sending the bill to the floor for debate.
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."
Republicans said they now expect Democrats to jettison a $50 billion fund that would have been financed by banks to help liquidate large failing institutions. The Republicans said they also expect Democrats to tighten language so the bill would mandate that shareholders' stakes in a failing firm be wiped out. The current bill says there would be that presumption.
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 the consumer protection provision.
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 a 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.
© Copyright 2023 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.