MARY LOUISE KELLY, HOST:
We report next on a rare occurrence in the Senate - a bipartisan bill. It's a banking bill that would scale back some parts of the Dodd-Frank Wall Street regulations for smaller banks. The bill has exposed divisions among Democrats over protecting President Obama's legacy. NPR's Kelsey Snell reports.
KELSEY SNELL, BYLINE: Some quiet cooperation broke out this week in Washington when 67 senators voted to start debate on a bipartisan banking bill. But Massachusetts Senator Elizabeth Warren says the bill behind the teamwork could be the start of a slippery slope towards financial chaos.
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ELIZABETH WARREN: People in Congress may have forgotten the crash 10 years ago. But I guarantee that people across this country have not forgotten.
SNELL: She says the bill wouldn't just help small banks. It would also ease restrictions on some bigger banks. But Senate Majority Leader Mitch McConnell says the bill is a bright spot in a year that has been full of partisan squabbling over everything from taxes to immigration.
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MITCH MCCONNELL: This week we're going to be dealing with a bill that I think pretty much breaks through the notion that there can't be bipartisan cooperation to do important things.
SNELL: Democrats generally agree that bipartisanship is good. But some progressives, like Warren and Ohio Senator Sherrod Brown, say scaling back parts of Dodd-Frank isn't the answer.
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SHERROD BROWN: I know people in this institution - especially those that get lots of money from Wall Street - like to blame Dodd-Frank for so many community banks going out of business.
SNELL: Opponents say they want to help community banks without undermining regulations for big banks - the very regulations Democrats hope will avoid another day like September 15, 2008.
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UNIDENTIFIED REPORTER: It was a historic day with Wall Street shaken to its very foundation today.
SNELL: That was the start of a stock market collapse. Banks were on the verge of bankruptcy, and they got a taxpayer-funded bailout that many people opposed. In 2010, Congress passed the Dodd-Frank Wall Street regulations, and President Obama signed them into law.
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BARACK OBAMA: This reform will help foster innovation not hamper. It is designed to make sure that everybody follows the same set of rules.
SNELL: Today many critics, including more than a dozen Democrats, say that's not exactly how things worked out.
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JON TESTER: Many of our community bankers are hanging up their hats, and our local banks are being swallowed up by bigger banks. And ultimately, they will be swallowed up by the folks on Wall Street.
SNELL: That's Democrat Jon Tester. He's from Montana where there used to be 72 state-chartered banks. Tester says there are now 49, and he blames one-size-fits-all regulations. Tester is up for re-election this year in a state that President Trump won by more than 56 percent in 2016. And defending those 49 banks could be a key part of winning that race. Another Democrat up for re-election this year in a state won by Trump is North Dakota Senator Heidi Heitkamp.
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HEIDI HEITKAMP: When you look at the challenges that rural America faces, the access to capital has to be on the top of the list.
SNELL: She says the bill is narrow and targeted at those smaller banks. But progressives like Warren say Democrats will have to answer when voters ask why a bank worth $250 billion is regulated the same way as a tiny local bank.
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WARREN: Everyone who votes for this bill has to acknowledge that truth.
SNELL: Or Democrats in states that went for Trump may find that a little bipartisanship goes a long way. Kelsey Snell, NPR News, the capital.
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