October 31, 2009

Opposition to congressional proposals to tighten regulation of the financial-services industry is starting to fracture, as interest groups make their own deals to avoid the new rules.Influential business groups have won exemptions from the proposed regulations in recent weeks, and some are now backing the legislation, which would largely no longer affect them.

The venture-capital industry, for example, won an exemption from a new requirement that private-investment funds disclose more of their activities to government regulators. The exemption was included in legislation proposed by Rep. Paul Kanjorski (D., Pa.) and approved by the House Financial Services Committee this past week.