(Bloomberg) -- Negotiations to ease bank regulations between the top Republican and Democrat on the Senate committee that writes financial laws have broken down. Ironically, that could be good news for Wall Street.
Mike Crapo, the Republican chairman of the Senate Banking Committee, and Senator Sherrod Brown, an Ohio Democrat, have halted their bipartisan discussions over revising the Dodd-Frank Act. The lawmakers have been pursuing a compromise for months.
Areas where there was the most daylight included providing relief for small community banks, and perhaps reducing tough oversight of regional banks. But it was not meant to be.
"After working in good faith, it's clear we will not be able to reach a compromise," Brown said in a Tuesday statement.
Moderate Democrats
With Crapo and Brown agreeing to disagree, bank lobbyists and their GOP allies in Congress are free to move on to Plan B: trying to persuade moderate Democrats from states President Donald Trump won last November to go even further in cutting back financial rules. Senators such as Heidi Heitkamp of North Dakota and Joe Donnelly of Indiana are top targets.
Still, getting any significant changes to Dodd-Frank through Congress would be challenging, because lawmakers continue to be bogged down with high profile issues like tax reform. And any legislation overhauling financial rules would probably require support from at least some Democrats to pass.
Crapo didn't immediately comment on the talks. It's not clear what policy disagreements led to the stalemate.
Brown, up for re-election next year, is a progressive who faces increasing pressure from far left members of his party, including Senator Elizabeth Warren, to decline any overtures from the GOP. So there was never much hope that he could strike a compromise with Crapo that would provide relief for Wall Street megabanks.
To contact the reporter on this story: Elizabeth Dexheimer in Washington at edexheimer@bloomberg.net.
To contact the editor responsible for this story: Jesse Westbrook at jwestbrook1@bloomberg.net.
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