U.S. senators are planning to mark the 10th anniversary of Wall Street’s meltdown this year with a gift to the nation’s banks: a bill that would unravel regulations put in place after the crisis.

The proposed rollback of some key post-crisis rules – which could advance in the coming weeks – is one of the few examples of bipartisanship in Washington since President Donald Trump's election.


Yet the bill is driving a wedge between Democrats and threatening to magnify the party's divisions as it fights to win back Congress this year.

On one side are moderate Democrats such as Sens. Heidi Heitkamp and Jon Tester from Republican-leaning states who support the legislation because they say it will provide relief to small and regional banks and boost rural economies.

On the other are progressives like Sens. Elizabeth Warren, Sherrod Brown and their activist allies, who argue that the bill will put consumers at risk. They're working to undercut the party's centrists before the vote, with several of the moderates — as well as Brown — facing tough reelection campaigns this year.

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That the legislation is coming a decade after the worst financial crisis since the Great Depression has fueled passions around the debate.

“I’m amazed that, on the 10th anniversary of the 2008 financial crisis, some Democrats are supporting the Trump administration and Senate Republicans on a bill to roll back the financial rules we put in place,” Warren, a Massachusetts Democrat, said in an interview.

The bill would scale back regulations that Democrats pushed through in the 2010 Dodd-Frank Act — the sweeping statute that rewrote the rules of the financial industry and was one of President Barack Obama's signature achievements.

Now lawmakers on both sides of the aisle say the landmark law should be recalibrated to ease restrictions on lenders, in particular the smallest banks that were not responsible for the worst excesses that led to the crisis.

For moderate Democrats from states that Donald Trump won in 2016, it's a chance to show voters they can work with Republicans and help their local economies. Trump administration officials have been supportive of the Senate legislation.

The infighting isn't expected to take down the bill, which probably has enough support to escape a filibuster, thanks to the 12 Democrats co-sponsoring the legislation. House Republicans, who have proposed more dramatic rollbacks, might pose a bigger hurdle. But the Senate floor debate could have repercussions in this year's elections and beyond, as Democrats try to convince voters they can effectively oversee the economy.

Democrats who oppose the legislation are emboldened by the expectation that most of their caucus will be on their side.

Brown, who is leading efforts to undermine the bill as the top Democrat on the Banking Committee, said his party is "overwhelmingly against it."

"I've talked to damn near everybody about this," he said.

Brown says the bill's backers are overselling its benefits to the smallest lenders and that easing rules for larger banks would threaten the economy.

“The public doesn't want us to lay down for the banks," he said. "The public doesn't have collective amnesia about what happened 10 years ago like senators do."

The legislation, approved by the Senate Banking Committee last year, has also racked up other critics among Democrats who have been floated as potential presidential contenders in 2020. Sens. Kirsten Gillibrand (D-N.Y.) and Kamala Harris (D-Calif.) say they will oppose it.

Yet as Brown leads the charge against the bill, he himself confronts tensions back home in Ohio over his role.

Ohio is the base of a substantial financial services industry, including big regional banks such as Fifth Third Bancorp and KeyCorp.

Regional banks have been lobbying for years for the legislation. The Senate bill would benefit them by raising a key threshold above which banks are subject to stricter regulation. The new trigger that banks would face under the bill is $250 billion in assets, up from $50 billion now. The higher bar for bank oversight would scale back requirements for many of the country's largest financial institutions, such as BB&T, American Express and SunTrust.

The bill doesn't do as much to roll back regulations for the biggest global banks based in the U.S., such as JPMorgan Chase, Bank of America and Citigroup.

Brown flirted with the idea of going along with the legislative package last year, but he was unable to reach agreement with Senate Banking Chairman Mike Crapo (R-Idaho).

His exit opened the door for a core group of moderate Democrats — Heitkamp, of North Dakota, Tester, of Montana, Joe Donnelly, of Indiana and Mark Warner, of Virginia — to work out a deal with Crapo.

Warren, who is expected to easily win reelection this year and is seen as another 2020 presidential contender, may have more of a free hand in the debate to antagonize banks and the Democrats who back the bill.

She said the issue is "whether or not senators are on the side of protecting the economy and taxpayers or on the side of giant banks."

“Remember Countrywide?" she said, referring to the mortgage lender that became synonymous with the crisis. "It was about $200 billion, which is smaller than some of the banks that will be deregulated by this bill. The heart of this bill is to take 30 of the 40 biggest banks in this country off the watch-list so that they can load up on risks again and if things go wrong put the American taxpayer back on the hook."

Brown and Warren are backed by outside activists that are mobilizing to stop the bill from getting traction. They're trying to make it politically painful for Democrats to stand up for it.

Indivisible, an increasingly influential liberal advocacy group that formed as part of the resistance to Trump's election, has published a detailed script outlining how to rebut the bill in calls with Senate staffers.

Indivisible is also calling on its supporters to confront senators about the legislation during the congressional recess. In sample town hall questions, it suggests that voters ask Democratic senators whether they will commit to opposing "this Republican down payment on ending regulation of Wall street."

Another progressive group, Demand Progress, has launched a social media campaign through its Rootstrikers arm identifying the bill's Democratic co-sponsors as the "#BailoutCaucus."

Public Citizen, the nonprofit consumer watchdog, has been making its case against the legislation on the Hill and by coordinating with allies in the states of Democrats who have co-sponsored the bill.

"We're making it clear that there will be political consequences for being on the wrong side of this bill," Demand Progress campaign director Kurt Walters said.

"We and others will then ramp up pressure on potential swing votes as necessary."

Crapo says he hopes the Senate will take up the bill shortly after lawmakers return from their Presidents Day break. Congress left town for a weeklong recess Thursday without teeing up the legislation.

For the bill's supporters, the focus is on maintaining the core group that has helped the rare bipartisan compromise advance this far.

"We have enough votes right now to pass it," Heitkamp said. "I know there are people who would like to see 70-75 votes. Maybe we can't get there, but we'll continue to have the discussion."

"Why is it a bad bill? Why is it dangerous?" Tester said in an interview, when asked about the opposition to the proposal. "We give relief to community banks.

"This should have been done years ago. ... This is going to allow for access to capital in rural areas like Montana," he said. "I don't get it."

The problem with winning over more Democrats is that there is little room to negotiate among the coalition of supporters when it comes to making changes that newcomers might seek. That's why the biggest threat to the bill's passage is the House, where Republicans want to do much more to dismantle Dodd-Frank. For now, it's unclear what they will try to add to the bill and whether Senate Democrats would go along with it.

"There is a rule, and this goes to working with the House as well: You don't get to amend this thing unless we all agree," Heitkamp said.

