WASHINGTON — Senate Democrats Tuesday failed for the second straight day to garner the 60 votes they needed to move forward with consideration of a massive financial regulatory reform bill by the full Senate.

A cloture vote, which would limit debate on the bill, failed by 57 to 41, the same as the initial vote Monday, with all Senate Republicans voting against it as well as Sen. Ben Nelson, D-Neb. The opponents argued that a bipartisan agreement on the massive measure should be accomplished before the full chamber considers the legislation.

Before the vote, Senate Banking Committee Chairman Christopher Dodd, D-Conn., continued to negotiate with Sen. Richard Shelby of Alabama, the committee’s ranking Republican.

But Democratic Majority Leader Harry Reid of Nevada accused Republicans of pushing for a back-room deal before beginning to debate the measure on the full floor.

“For the second day in a row, they blocked us from even beginning the debate about how to hold Wall Street accountable, and insisted that all the details of this bill be hashed out behind closed doors, instead of on the floor of the Senate in full view of the public,” Reid said in a statement.

Separately Tuesday, the Regional Bond Dealers Association urged Dodd and Shelby to ensure the legislation does not establish “a two-tier system of industry regulation where large firms, implicitly backed by the federal government, are granted a competitive advantage over smaller, 'Main Street’ dealers.”

In a letter, RBDA said it is concerned that the legislation does not go far enough in addressing three factors that caused the financial crisis — “excessive leverage, excessive concentration and lack of transparency.”

For instance, the group said the legislation attempts to address excessive concentration of liabilities and excessive risk-taking in part by including a version of the “Volcker Rule” that would prohibit banks from running proprietary trading desks or investing in hedge funds and private-equity firms. But the regional dealer group warned that the provision is “deficient.”

“It does not define important terms, such as 'trading book’ or what is a targeted 'financial instrument’ (other than an exception for certain U.S. obligations and municipal bonds),” RBDA chief executive officer Michael Nicholas wrote in the letter. “In addition, much as it does with the minimum capital and maximum leverage requirements, the bill defers almost entirely to regulators and provides no certainty.”

The association also raised concerns that a $50 billion resolution fund to pay costs for the Federal Deposit Insurance Corp.’s liquidation of a large, failing financial institution is worded in a way that would guarantee the firm’s obligations would be fully backed by the federal government.

“Because of this guarantee, creditors will tend toward largest firms and away from smaller ones,” RBDA said. “This undermines the competitive position of the small firms, relieves the large firm of market discipline, and further incentivizes precisely the type of risky growth that effective regulatory reform should bar.”

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