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Brown Objects to Tax, Imperils Fin-Reg Bill

Senator Scott Brown's objection to a $19 billion fee provision might mean a shortfall of votes for the financial regulation bill.

WASHINGTON D.C. (

TheStreet

) -- Lawmakers might beg forced to make changes to the $19 billion fee imposed on banks in the finance reform bill to win crucial votes, according to multiple reports, citing anonymous sources.

The fee has met with strong objections from three of the four Republicans who supported the original version of the bill. The strongest objection has come from Senator Scott Brown of Massachusetts.

In a letter to the Senate Committee on Banking Chairman Chris Dodd and House Committee on Financial Resources Chairman Barney Frank, Senator Brown objected to the latest provision, deeming it a "bank tax" that would ultimately be passed on to the consumers in the form of higher fees and would lead to reduced funding for small businesses. "If the final version of this bill contains these higher taxes, I will not support it," he wrote.

With death of Senator Robert Byrd (D) and two other Republicans Senators expressing reservations about the bank fee, the Obama administration may fall short of the crucial 60 filibuster-proof votes needed to pass the bill in the Senate. The democrats had hoped to pass the bill by the July 4th weekend.

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The financial regulation bill has wide-sweeping measures, including granting regulators the authority to monitor big institutions and shut them down, tighter regulation of the derivatives market and stronger consumer protections.

-- Reported by Shanthi Venkataraman in New York.

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