Once critical of financial regulation bill, Republicans change their tone

By Brady Dennis and Shailagh Murray
Washington Post Staff Writer
Wednesday, April 21, 2010

Key Senate Republicans on Tuesday began to back away from their sharp criticism of proposed new financial regulations and expressed optimism that a bipartisan deal on a bill that would drastically change the way Wall Street operates could emerge in the coming days.

After a week of attacking the proposals as paving the way for new taxpayer "bailouts," Minority Leader Mitch McConnell (R-Ky.) said on the Senate floor that he was "heartened to hear that bipartisan talks have resumed in earnest." Later, after a meeting with fellow Republicans, he told reporters that while he believes that there are still serious flaws in the legislation, "I'm convinced now there is a new element of seriousness attached to this, rather than just trying to score political points. . . . I think that's a good sign."

The change in tone came as the Security and Exchange Commission's lawsuit against Goldman Sachs for allegedly defrauding investors continued to dominate headlines, underscoring public anger at Wall Street and reminding lawmakers of the potential consequences of inaction. In the corridors of the Capitol, members of both parties, as well as a sea of lobbyists from across the financial spectrum, jockeyed to shape key provisions of the wide-ranging legislation before it hits the Senate floor.

The massive bill put forth by Sen. Christopher J. Dodd (D-Conn.) would create a new consumer protection bureau within the Federal Reserve to protect against lending abuses. It also would create oversight of the enormous derivatives market, reduce the regulatory powers of the Fed and give the government authority to wind down large, troubled financial institutions in an orderly way.

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