On Thursday, the Senate rejected by a 61-38 vote a Republican-crafted alternative to the consumer protections included in the financial regulatory reform bill.
The amendment received broad GOP backing, but two members of the party – Maine's Olympia Snowe and Iowa's Charles Grassley – dissented, giving Democrats the edge on the hotly contested issue.
During the day Thursday, Republican lawmakers made a late-game push for their version of the consumer-protections provision, which would have established a division within the Federal Deposit Insurance Corp. As introduced by Sen. Chris Dodd, D-Conn., the reform bill would create an independent bureau that would be contained within the Federal Reserve.
Republicans argue that the authority of Dodd's independent agency would be too broad, adding "massive new bureaucracy to regulate orthodontists, florists, home renovation companies, and other main street businesses," according to statements from Sen. Richard Shelby, R-Ala., at a Thursday press conference.
While Shelby and other members of the GOP say their amendment would be more narrowly focused on the companies and individuals that were the source of the financial crisis, Democrats say it would have gutted necessary protections, including carve-outs for payday lenders, debt collectors and other financial services operations.