Financial Overhaul May Yet Draw Republicans, Gregg Says

The financial overhaul legislation, which has drawn the opposition of all 41 Republican senators, may still attract bipartisan support, said Senator Judd Gregg, a New Hampshire Republican and member of the Banking Committee.

“I hope we’ll do a negotiated compromise because there’s not really a big partisan divide here,” Gregg told Bloomberg Radio’s “Bloomberg Surveillance” today. “It’s just a question of getting it right.”

Gregg said he’s working with Senator Jack Reed, a Rhode Island Democrat, on a proposal to regulate the derivatives industry. He said lawmakers need to be guard against placing too many restrictions on derivatives and other parts of the financial industry.

The Senate must be careful that “we don’t overreact in a way that forces assets off shore,” Gregg said. He also said developing regulations so that companies don’t grow “too big to fail” is important.

Gregg said he found it “a little disconcerting” that the Securities and Exchange Commission in an April 16 lawsuit accused Goldman Sachs Group Inc. of misleading investors in 2007 as the Senate is scheduled to debate the financial measure.

The SEC’s decision to move forward on a partisan 3-2 vote was “strange,” Gregg said.

With such a close vote, “I was a little surprised there wasn’t a little more negotiation on how you resolve it prior to the action being brought,” he said.

To contact the reporter on this story: Jeff Bliss in Washington jbliss@bloomberg.net.

Senator Judd Gregg, Republican from New Hampshire, listens during a Senate Banking Committee vote on the nomination of Ben S. Bernanke for a second term as chairman of the U.S. Federal Reserve in Washington, D.C., on Dec. 17, 2009. Photographer: Brendan Hoffman/Bloomberg