Why Sherrod Brown Is Wall Street's Biggest Nightmare In Washington DC

With the impending retirement of Sen. Tim Johnson (D-S.D.), a vacancy will open up at the top of the Senate Banking Committee – and Wall Street lobbyists are terrified that one raspy-voiced man from Ohio will step in to fill the post.

Ohio Democratic Sen. Sherrod Brown has kept a relatively low-profile since his election to the Senate in 2006. But behind-the-scenes, he has built up a reputation as biggest bank-buster in the Democratic Party, superseding even Massachusetts' Sen. Elizabeth Warren as the top bogeyman for financial industry lobbyists.

Since the passage of the Dodd-Frank financial reform bill, Brown has become the leading voice in the Senate calling for breaking up big banks, introducing legislation in the last Congress that would have ensured that no bank held more than 10 percent of total insured deposits and capped non-deposit liabilities at 2 percent of GDP.

In practice, that measure would have forced the six biggest banks — Bank of America, JPMorgan Chase, Citigroup, Wells Fargo, Goldman Sachs, and Morgan Stanley — to shrink significantly, effectively putting an end to financial institutions that are "Too Big To Fail."

"The largest banks are in fact too big to fail, they are too complex to manage, and they are certainly too complicated to regulate," Brown said in a recent interview with Business Insider. "They continue to jeopardize our financial system because of their size, their complexity, their interconnectedness. And they also have advantages in capital markets over other banks, so limiting their non-deposit liabilities would make the whole system more competitive."

And while Brown's last attempt at ending Too Big To Fail gained little traction in Congress, — just three Republican voted for the amendment out of 33 votes total — the Ohio Democrat has not given up.

This year, he's teamed up with Louisiana Republican Sen. David Vitter to craft similar legislation, and says that, so far, 10 Republican lawmakers have gotten on board.

Brown sees this fresh, bipartisan support as indication that the tides are turning on Wall Street's biggest banks.

"I think the momentum has been building in the last year," Brown said. "You're seeing writers as varied as George Will and Gretchen Morgenson of the New York Times to people like Jon Huntsman and [former FDIC Chair] Sheila Bair, who have come out of Republican politics, and Fed Governors like Richard Fisher [president of the Dallas Fed] and Dan Tarullo – a host of people who have been very serious thinkers about these things — realize that this is a significant problem in the financial system."

"There has been more progress over the last year than any of us thought was possible," he added.

But Brown admits that he is up against some powerful foes — and they have a vested interest in keeping the Banking Committee gavel out of the Ohioan's hands.

"These banks are not just powerful in the marketplace, they are also politically powerful," Brown said. "That's why it doesn't come easy – because of their political power with agencies, with Congress, all of that."

Unlike some of his Senate colleagues, Brown has avoided political grandstanding. He rarely appears on the Sunday talk shows, and most people outside of Ohio probably wouldn't recognize his face.

But therein, perhaps, lies his political power. Senate staffers on both sides of the aisles readily admit that Brown is affable, and generally well-liked around the Hill — a fact which makes it difficult for Wall Street lobbyists to turn him into a political lightning rod as the Senate leadership works out who will succeed Johnson.

"I'm just building the coalition here fairly quietly," Brown said. "It's not an issue that people rally around so much — breaking up the banks, limiting their liabilities, that's not something that excites people particularly. But I think it will. We're seeing intellectual and political support growing, and I think we'll continue to see that."

"I'll keep speaking out about it," he promised. "I think the issues here are serious, they're of substance, and there's just so much more support here than there was three years ago."