As Treasury Secretary Timothy Geithner reached out to Republicans to get them on board with financial reforms, Sen. Scott Brown of Massachusetts, who won the seat vacated by former Sen. Edward Kennedy, vociferously defended the mutual fund industry.

Brown told The Wall Street Journal he raised several concerns with the Treasury secretary, including treating mutual funds like bank products.

“This bill would count them like banks and prohibit them from doing things they have done for 100-plus years,” Brown recounted telling Geithner. The Treasury secretary then reportedly responded that Brown’s assessment of the proposed financial reforms was inaccurate, that the bill didn’t apply to mutual funds.

However, there is a clause in the Senate bill that would explore the impact of mutual fund performance information in advertisements (see "Financial Reform Bill Hits Mutual Fund Ads," MME April 22, 2010.) It would also require hedge funds with $100 million of assets under management to register with the Securities and Exchange Commission.

Brown said legislators are now working to exclude mutual funds from the bill altogether.