The banking industry has also succeeded in working closely with Republicans to water down and then block a measure that would give bankruptcy judges greater authority to modify mortgages, including reducing principal payments. Senate Republican leaders say they have the support of all 41 of their members  enough to kill the provision by making it impossible to get the 60 votes necessary to cut off debate.

Senate Democrats, hoping to resolve the impasse, have opened negotiations in recent days, but not with their Republican counterparts. Instead, in an effort to divide the industry, the Democrats, led by Richard J. Durbin of Illinois, Charles E. Schumer of New York and Christopher J. Dodd of Connecticut, have been in talks with Bank of America, JPMorgan Chase and Wells Fargo, along with a group of credit unions. The lawmakers’ hope is that those institutions would exert pressure on Republican lawmakers and reluctant Democratic moderates.

Even if those negotiations are successful, the Democratic lawmakers are still likely to water down the bankruptcy bill further in the industry’s favor.

Before the negotiations, Citigroup had been the only major bank to support the bankruptcy measure, often referred to as “cram-down” legislation because it would give judges the authority to dictate terms to lenders and investors who own mortgages bundled into securities.

“The cram-down provision, if it became law, would raise the costs of all mortgages for everyone,” said Edward L. Yingling, president and chief executive of the American Bankers Association. “It’s a fact that if you undermine the value of the collateral by allowing cram-downs, you make the loans riskier and banks will price that risk accordingly by rates going up.”

Supporters of the bankruptcy measure had been planning to tie it to another banking bill that the industry favors.

That legislation would make permanent the temporary increase in deposits guaranteed by the Federal Deposit Insurance Corporation, to $250,000 from $100,000. It would also increase the F.D.I.C.’s credit line with the federal government to $100 billion, from $30 billion, thus enabling regulators to reduce a proposed special premium the banks will owe the F.D.I.C. later this year by more than 50 percent  a $7.7 billion savings.