The top Republican negotiator on financial regulatory reform legislation said Tuesday that the form of the bill's consumer agency in the "biggest obstacle" keeping the two sides from making a deal.

Senate Banking Committee Ranking Member Richard Shelby (R-Ala.) said that if Democrats meet the GOP "halfway" on the so-called Consumer Financial Protection Agency (CFPA), an agreement could be struck soon.

"The biggest obstacle is probably the consumer agency and the reach and the scope of it right now," Shelby told reporters at the Capitol. "If they will meet us halfway on that, I think we could get a bill."

Shelby expressed confidence that a deal between Republicans and Democrats would get done -- which would likely allow the bill to come before the Senate floor. 

Senate GOPers on Monday blocked a cloture vote that would allowed formal debate to begin on the Wall Street bill, which is a top priority of the Obama administration.

The Alabama Republican said that he and Banking Committee Chairman Chris Dodd (D-Conn.) have nearly reached an agreement on the provisions that deal with "too big to fail" financial firms, one of the main sticking points between the two sides.

Republicans have objected to moving forward with debate in part because they say the language allows for permanent bailouts. But Shelby said the two sides are making progress.

"We have made considerable progress in the last several days -- last couple of days, actually -- in dealing with the section on too big to fail," Shelby said. "We -- they basically have agreed to some of our recommendations to strengthen that section, to send that message, as I say, that nothing's too big to fail, and if you fail we're going to wind you up and so forth."

It's unclear how the deal will look; the White House have said they will not accept watered down language just to please Republicans but has also said it expects bipartisan support for the bill.

But the GOP senator's comments show that more still needs to be done before Democrats can get the 60 votes necessary to move forward with debate.

The consumer agency, which would regulate products such as credit cards and loans, is supported by many Democrats but many Republicans have argued it will hurt small business and provide a needless layer of additional oversight.