The development came after Senate banking committee Chairman Chris Dodd, D-Conn., and ranking member Richard Shelby, R-Ala., concluded they had once again come up short on efforts to negotiate a bipartisan compromise on the issue, The Washington Post reported.
"Unfortunately, Sen. Shelby believes that continued talks ... will not bring the negotiators any closer to an agreement," Senate Minority Leader Mitch McConnell, R-Ky., said. "Now that those bipartisan negotiations have ended, it is my hope that the majority's avowed interest in improving this legislation on the Senate floor is genuine."
In a statement, McConnell said Dodd has assured Shelby "changes will be made to end taxpayer bailouts and the dangerous notion that certain institutions are too big to fail."
Earlier Wednesday, Senate Republicans held together, defeating a third effort to bring the financial reform bill to formal debate on the Senate floor with a 56-42 vote.
In response to the vote, aides said Senate Majority Leader Harry Reid, D-Nev., planned to dramatize the impasse by keeping the Senate in session through the night.
During a speech Wednesday evening in Quincy, Ill., President Barack Obama said, "We need good old common-sense Wall Street reform."
He said the Democratic proposal in the Senate would eliminate bailouts and protect consumers from deceptive financial products.
"But this debate comes down to a simple choice," the president said. "Are we going to go down the same road, where irresponsibility of a few can put millions of families at risk and stick taxpayers with a tab?
"Or are we going to protect consumers, and strengthen our financial system, and put rules in place that keep this from happening ever again?"