By DealBook October 15, 2009 11:16 am October 15, 2009 11:16 am

Update | 12:34 p.m. A key House committee voted on Thursday to regulate, for the first time, trading in the arcane financial instruments known as derivatives, which have been linked to the financial crisis that shocked Wall Street and cut into the savings of millions of Americans, The New York Timess Stephen Labaton reports from Washington.

The 43-to-26 vote by the Financial Services Committee was mostly along party lines and was a big step in President Obama ’s proposed overhaul of rules covering the nation’s financial system.

The measure is part of a bill that will be debated by the House and Senate. Michael S. Barr, the assistant Treasury secretary for financial institutions, called the bill “absolutely essential to preserving a strong marketplace.”

One common derivative is the credit default swap, which has been cited repeatedly in the various examinations of the near-collapse of the financial system.

The day-to-day progress of the regulatory bill is being followed by a large cadre of people who hope to influence its contents as it makes it way toward final passage. Representatives from a surfeit of industries have descended on the Financial Services Committee.

The financial services industry alone has poured more than $220 million into lobbying in 2009, much of it in anticipation of this Congressional effort now beginning. As usual for major financial services legislation, lawmakers have heard an earful from small community banks and large Wall Street banks, as well as from insurance companies, credit card companies, credit unions, mutual funds and hedge funds.

But since virtually every imaginable company could be touched by the comprehensive legislation proposed by the Obama administration, the surprisingly broad array of lobbyists trooping to Capitol Hill also includes advocates for airlines, pawnbrokers, real estate developers, farmers, car dealers, manufacturers, retailers and energy and telephone companies. They want to make sure any new oversight of the financial system does not lead to tighter regulations of their businesses or make it more expensive for them to finance their operations or hedge their risks.

Other groups are lobbying over whether the rules should be changed to make it easier to sue corporations and their advisers and whether restrictions should be eased to enable shareholders to have a greater say in the election of directors and the pay of senior executives.

“The legislation proposes to regulate significant aspects of the economy, and any time you have that kind of legislation, it is bound to draw to Congress the interests of many — lawyers, labor unions, consumer groups and many companies,” said Steven A. Elmendorf, a former senior aide to the House Democratic leadership who represents several major financial institutions and groups.

Mr. Elmendorf suggested that the legislation could keep the lobbyists busy for many weeks since it is the subject of deliberations by at least four committees in the House and Senate, along with floor action in both chambers and then more meetings to reconcile competing bills.

“There will be a lot of opportunities and ways the bill can change,” he said. “This will be a long process.”

Gazing across a hearing room jammed with lobbyists and lawyers, Representative Barney Frank. Democrat of Massachusetts and the chairman of the House Financial Services Committee, made an observation on Wednesday about a proposed amendment that some lobbyists interpreted as a comment about the keen interest of their clients.

“Watching sausage being made and watching legislation being made isn’t always attractive,” Mr. Frank said.

Even though President Obama vowed to change the culture of corporate influence on Washington, the administration has contributed, albeit inadvertently, to making this a banner year for lobbyists. As the White House has awakened the alphabet soup of federal agencies from their deregulatory slumber of the previous eight years, lobbying shops have emerged to fight for their clients’ newfound interests.

In the case of financial overhaul legislation, the corporate interests have particular sway with moderate and conservative Democrats, whose votes are essential for the legislation to progress through Congress. So far the lobbyists have been moderately successful in influencing the contours of the legislation, judging by the ever-growing list of exemptions from tougher oversight of derivatives and from supervision by the proposed consumer financial protection agency.

The House Financial Services Committee, for instance, approved a provision on Wednesday that Mr. Frank said would exempt “the great majority” of businesses that use derivative instruments to hedge their business risks from trading such instruments through exchanges or clearinghouses. Senior officials at the Commodity Futures Trading Commission and the Securities and Exchange Commission have been critical of the exemptions, saying they would create too large a loophole for financial instruments that were unregulated and played a central role in the economic crisis.

On Wednesday, the administration announced its support for the exemptions. Mr. Barr, the assistant Treasury secretary, said in a telephone briefing with reporters that, while the administration did not propose the exemptions, they were “reasonable ones” that would still permit aggressive oversight because the legislation would impose supervision on the dealers of derivatives instruments.

The new consumer protection agency has become a particular magnet for lobbying efforts. Bankers have waged a multimillion-dollar campaign to kill the agency or at least to substantially weaken the powers the administration would like it to have. The United States Chamber of Commerce, which claims a membership of more than three million businesses, is conducting a $2 million advertising campaign against the agency. The campaign has gained enough political traction to prompt President Obama to publicly chastise it as misleading.

The chamber joined 17 other trade associations, including the Financial Services Roundtable and the Business Roundtable, in a letter sent this week to House members opposing the agency.

The administration has proposed that the new agency protect consumers from abusive or deceptive credit cards, mortgages and other loans. But responding to the concerns that the agency could try to exert its jurisdiction over an array of other industries that lend money, like retailers and car dealers, Mr. Frank has made clear his intention to exempt many other businesses from oversight as part of his effort to steer the measure through Congress.

The political obstacles to the creation of a consumer protection agency are formidable. In the last decade, banking and other interests that now oppose the agency’s creation contributed more than $77 million to the members of the House Financial Services Committee, according to the Center for Responsive Politics, a nonpartisan research organization that studies the influence of money on policy.

Two of the largest recipients of money from the financial sector over the period have been Mr. Frank, whose campaigns have received more than $3 million, and Representative Spencer Bachus of Alabama, the senior Republican on the committee and a leading critic of the administration’s plan.