Senate Banking Committee

Momentum to overhaul the mortgage finance system had been slipping, and with Democrats divided over the Senate's banking relief bill there's virtually no chance more bipartisan deals can be worked out.

One purpose of the Senate bill was for small banks to rein in skyrocketing costs, but some bankers question whether the changes will save them money, and adapting to the reforms may even increase spending.

With the Senate finishing its work on a regulatory relief package, a showdown in the House still looms while critics of Dodd-Frank weigh whether this is their last shot at unwinding it.

Former Rep. Barney Frank rejected concerns voiced by other Democrats that a Senate bill rolling back some provisions of the Dodd-Frank Act will fuel another financial crisis.

Unable to come to an agreement on which and how many amendments will be offered to a Dodd-Frank regulatory relief bill, the Senate will have to return next week before voting on the legislation.

The Senate is poised to pass the most substantial bank regulatory relief since the crisis, but any disruption of the post-crisis regime is still eclipsed by how much the bill enshrines Dodd-Frank.

House Chief Deputy Whip Patrick McHenry, R-N.C., said House lawmakers are having discussions with the Senate about ways to go further on rolling back Dodd-Frank before the Senate is expected to hold a floor vote.

As a bipartisan regulatory relief bill approaches the finish line in the Senate, the House has mostly stood on the sidelines. But no one expects the lower chamber to just rubber-stamp the deal.

Analysts believe a bipartisan coalition supporting limited regulatory relief will hold, but the toxic political environment and more looming budget battles to come could obstruct the banking bill's path.

Senate negotiators are working on a bill that would place Fannie Mae and Freddie Mac into receivership and replace them with multiple mortgage guarantors, according to sources.