Democrats drop bankruptcy aid provision: lawmaker

WASHINGTON (Reuters) - Democrats in the U.S. House of Representatives have abandoned attempts to insert a bankruptcy aid provision into a Wall Street bailout bill, U.S. Rep. Alcee Hastings said on Friday.

"There will be no bankruptcy" provision in the Wall Street bailout bill being negotiated on Capitol Hill, Hastings said House Financial Service Committee Chairman Barney Frank told Democrats in a closed-door meeting.

The provision was aimed at giving additional help to people facing foreclosure by letting bankruptcy judges modify the terms of a mortgage, lawmakers said.

Rep. Joseph Crowley, a New York Democrat and member of the House Democratic leadership, said he expected a bill would be passed by the end of the weekend, adding that removing the bankruptcy provision would make that more likely.

"There is the belief we would not be able to pass a bill with the provision," he said.

Lawmakers are working to craft a $700 billion financial rescue plan. President George W. Bush acknowledged on Friday there were disagreements, but said he was optimistic a deal could be reached to rescue the faltering U.S. financial system.

(Reporting by Richard Cowan; Editing by Eric Walsh)