Sept. 24 (Bloomberg) -- House Financial Services Committee Chairman Barney Frank said House and Senate Democrats have reached a deal on legislation to implement the U.S. Treasury plan to rescue financial institutions.

Frank and Senate Banking Committee Chairman Christopher Dodd will hold a meeting tomorrow to negotiate with Republicans, Frank told reporters today in Washington.

``We now have, as between the House and Senate Democrats, an agreement on what we think should be in the bill,'' said Frank, a Massachusetts Democrat.

Democrats have agreed to include provisions to limit executive pay for participating companies, allow the Treasury to take equity in the companies that get aid, strengthen oversight of the program, provide aid to help homeowners avoid foreclosure, and give bankruptcy judges the authority to modify mortgages for struggling borrowers, Frank said.

Congress and the Bush administration are trying to halt a turmoil that forced Lehman Brothers Holdings Inc. into bankruptcy and prompted the U.S. to take over American International Group Inc. Frank is leading House negotiations on the plan to let the Treasury buy as much as $700 billion in devalued assets to unfreeze markets.

Frank and Dodd will meet tomorrow with Representative Spencer Bachus, the top Republican on the House Financial Services Committee, and Senator Robert Bennett, a Utah Republican, Frank said. The bankruptcy provision will be a sticking point with Republicans, Frank predicted.

Lawmakers will also negotiate the amount of the plan, Frank said. ``There is conceptual agreement, including I think with Treasury -- people understand it's not going to be a straight $700 billion,'' he said.

To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net.

Last Updated: September 24, 2008 22:10 EDT