The GOP's senior member of the Senate Banking Committee, Richard Shelby (R-Ala.), told CNBC that one of the biggest shortcomings of a Democratic draft bill on financial reform is that it does not end the concept of too-big-to-fail
He said the government needs to send the message that "nothing is too big to fail."
Shelby's comments Friday echoed comments in a letter he sent to Treasury Secretary Timothy Geithner Thursday, where he said the the so-called Dodd bill—(for the panel's chairman Christopher Dodd (D-Ct.)—would create a "$50 billion slush fund" at the Treasury Department.
CNBC.com obtained a copy of the eight-paragraph letter, which also says the Dodd proposal gives the Fed "enhanced emergency lending authority that is far too open to abuse." (Click here to read the letter.)
"The secretary tells me he's very interested in putting the too-big-to-fail doctrine to rest," Shelby told CNBC Friday.
Geithner Thursday said he believes the administration was in a good position to get a measure approved quickly with the support of Republican lawmakers. That would stand in contrast to the administration's health care legislation, which did not attract Republican support.
"Our hope is, and I think we're very close, our hope is we're going to have Republicans join with Democrats in passing a strong bill quickly," he said.
Shelby agreed, saying, "I believe we can get a reg reform bill. I hope it’s a good one. If we can do this it will be a monumental."
The Senate Banking Committee on Monday approved a measure on a party-line vote with no Republican support. To be able to overcome the threat of a filibuster, Democrats will need to attract Republican votes when the measure comes up for debate in the full Senate.
The legislation working its way through Congress represents the most sweeping change in financial regulation since the 1930s.
It would give the government power to split up financially troubled firms considered to represent a threat to the economy. It also puts together a council of regulators to watch for risks in the financial system and creates an independent consumer watchdog.
Geithner said that the administration would not support any measure that did not provide for a consumer protection agency with an independent budget and the ability to write rules and enforce those rules across the financial system.
Geithner spoke at the end of a meeting with officials from the Defense Department and military advocacy groups to discuss the need to pass financial overhaul with strong consumer protections. Geithner said this was especially important given that military families are often the victims of predatory lending practices.
"It's about providing basic protections for consumers across the country from the kind of ... abuse that was at the center of this financial crisis," Geithner said.