A hastily reconvened House-Senate conference committee has swapped out a controversial offset with an alternative aimed at staving off an eleventh-hour implosion of Democrats’ financial regulatory bill.

Over GOP objections, Democratic conferees voted to make the change, which would replace a $19 billion assessment on banks and hedge funds with a dual-pronged approach. The new language would end the $700 billion financial industry bailout fund, as well as increase the premiums that large banks must pay into the Federal Deposit Insurance Corp., which insures bank deposits.

Senate Banking Chairman Chris Dodd (D-Conn.) crafted the change, which was unveiled Tuesday, to try to woo Republican Sens. Susan Collins (Maine), Olympia Snowe (Maine) and Scott Brown (Mass.). The three voted for the Senate version of the bill last month, and Brown, in particular, balked at the original offset.

Dodd said that while he still thought the assessment on banks and hedge funds “made sense,” the reaction it spurred among Republicans who had voted for the bill last month necessitated the change. He described the new offset as “a better alternative than the one that was adopted in the wee hours of the morning” late last week, capping a marathon negotiating session.

But Republican conferees complained that the change ran afoul of a previous commitment to use leftover funds from the financial industry bailout to pay down the national debt.

Sen. Richard Shelby (R-Ala.), the ranking member on the Banking Committee, accused Democrats of employing a “budget gimmick.”

Republicans, who hold fewer seats on the conference committee, tried unsuccessfully to reopen other parts of the bill to negotiations.