A rift has developed between the chairmen of the main House and Senate committees dealing with hedge funds and their managers, according to conversations between the Hedge Fund Law Report and key congressional staff, reviews of numerous public statements by key figures and testimony before relevant committees in recent weeks.  While those committee chairmen – Senator Christopher Dodd of Connecticut, Chairman of the Senate Banking Committee, and Representative Barney Frank of Massachusetts, Chairman of the House Committee on Financial Services – broadly agree that some form of increased regulation of hedge funds and hedge fund managers would be an appropriate political (if not economic) response to recent economic events, they differ on the direction that increased regulation should take.  Judging by the flurry of recent bills, comments and other proposals on and around Capitol Hill, the drive to change or “reform” hedge regulation is well underway.  More than a dozen Senate and House hearings directly or indirectly focusing on hedge funds have been held so far, a slew of them coming in late March and early April.  We describe the current state of play on the Hill, including the Dodd-Frank face-off, recent testimony from Treasury Secretary Timothy Geithner, the status of the bill proposed in January by Senators Grassley and Levin to require registration of hedge funds, the views of Mary Shapiro of the SEC and Richard Baker of MFA and comments from Capitol Hill observers.