By Vicki Needham - 05/06/10 07:41 PM EDT
Two Republicans joined Democrats today in defeating an amendment to create a consumer protection agency by a 38-61 vote.
Republican Sens. Olympia Snowe (Maine) and Chuck Grassley (Iowa) voted against the proposal offered by their colleagues that would have established a Division of Consumer Financial Protection within the Federal Deposit Insurance Corporation, designed to replace the Consumer Financial Protection Bureau that Democrats want created at the Federal Reserve.
The amendment, authored by Senate Banking ranking member Richard Shelby (R-Ala.) and Senate Minority Leader Mitch McConnell (R-Ky.), created some heated debate on the Senate floor Thursday.
Democrats and Republicans haven't been able to reach an agreement yet on the structure of consumer protections for the financial regulatory reform legislation.
More Republican amendments on the issue are likely unless lawmakers can come to an accord on the thorny issue.
Republicans say a Democratic proposal is too sweeping and would wrap small business under unnecessary regulations whereas leading Democrats argue the alternative proposal won't create the necessary consumer protections.
Earlier today, President Barack Obama said the amendment would've have weakened consumer protections and looked like it had been written by opponents of Wall Street reform.