Senate Majority Leader Mitch McConnell said he's pessimisticthat Congress will overhaul the Dodd-Frank Act because he doubtsRepublicans can secure enough Democratic votes to make majorchanges to the sweeping legislation that tightened oversight ofbanks after the financial crisis.

“I'd love to do something about Dodd-Frank, particularly withregard to community banks but that would require Democraticinvolvement,” Kentucky's McConnell told Bloomberg News in aninterview Tuesday. “I'm not optimistic.”

McConnell said the 2010 banking law has had unintendedconsequences that have hurt the nation's smallest banks, a commonrefrain of Republican lawmakers. Any effort to revampDodd-Frank would probably have to go through the Senate BankingCommittee, which is led by Mike Crapo. While McConnell said he hasdiscussed the legislation with Crapo, the Idaho Republican hasindicated that there isn't much Democratic interest in revisitingit.

“So far, my impression is the Democrats on the banking committeebelieve that Dodd-Frank is something akin to the Ten Commandments,”McConnell said.

Despite McConnell's remarks, helping community lenders hasn'tbeen the main sticking point in negotiations between Republicansand Democrats. Ohio Sen. Sherrod Brown, the banking panel's topDemocrat, has said he supports relaxing rules for the smallestbanks. But Democrats have been vocal in resisting any changes toDodd-Frank that they say will aid Wall Street, such as scrappingVolcker Rule trading restrictions and weakening the ConsumerFinancial Protection Bureau.

On Tuesday, Brown pushed back on McConnell's contentionthat Democrats are blocking efforts for a bipartisancompromise.

“The Senate Republican leader seems to have forgotten the harmWall Street's greed and reckless behavior caused to millions ofworking families and taxpayers,” Brown said in a statement. “Ifthis were really about community banks, we might have come to anagreement years ago. Republicans are once again using them asleverage to help a rogue's gallery of special interests.”

Crapo has previously said efforts to revise Dodd-Frank would beslow as most major bills require 60 votes to pass the Senate,and Republicans hold just 52 seats. The House is moving faster,with that chamber's Financial Services Committee approvinglegislation earlier this month that would alter many of the law'skey provisions. House Speaker Paul Ryan has said he wants thelegislation to move to a floor vote as soon as possible.

Absent action by Congress, McConnell said rolling backDodd-Frank will fall to the Trump administration. After a slowstart, President Donald Trump has made progress in recent weeks infilling the agencies that oversee Wall Street with his ownappointees.

Trump, who has called Dodd-Frank a “disaster” that has made itdifficult for businesses to get loans, signed an executive order inFebruary requiring regulators to examine financial rules. TheTreasury Department is scheduled to issue a report on the findingsnext month, kicking off what the administration has promisedwill be a broad rewrite of regulations implemented underDodd-Frank.

Unless the situation in Congress changes, we will be “stuck withwhatever the administration thinks it can do on its own to modifythe impact of Dodd-Frank,” McConnell said.

Bloomberg News

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