Earlier today the Senate voted to approve an amendment to the portion of the financial regulatory reform bill dealing with “too big to fail” financial institutions.  The amendment is the result of an agreement reached earlier today between Senator Chris Dodd (D-Conn.), the chairman of the Senate Banking Committee, and Senator Richard Shelby (R-Ala.), the ranking member of that committee.

The amendment excludes the $50 billion liquidation fund previously proposed in the bill, opting instead to cover the costs of liquidations from asset sales and, in case of shortfalls, from fees assessed against other large firms.

The Senate also approved an amendment offered by Senator Barbara Boxer (D-CA) that would prohibit the use of taxpayer funds to bail out financial institutions.

Today’s vote was the first formal movement on the reform bill since Republican senators allowed debate to begin late last week on the legislation, and has cleared the way for voting to proceed on the hundreds of other amendments being proposed by senators from both sides of the aisle.