Rep. Frank: Dems Likely to Go it Alone on Financial Regulatory Reform

By Matt Loffman

Mar 19, 2010 1:49pm

ABC News’ Rick Klein reports: With bipartisan negotiations breaking down in both the House and Senate on financial regulatory reform, Democrats stand prepared to act alone this year, the chairman of a key House committee said today. House Financial Services Chairman Barney Frank, D-Mass., said on ABC’s “Top Line” that Republicans have chosen not to participate in serious reform efforts. Asked if financial regulatory reform would pass along party lines, he said: “Unfortunately, yes, and it was the Republicans who really decided that. “The House, when I became chairman in 2007 and first started working on some of these financial issues, we had a good deal of bipartisanship. And frankly, the leading Republicans on the committee that I chair were told by the Republican leadership that they had to stop cooperating,” Frank said. “And in the House when we voted on the bill last December, on the final vote, every single Republican voted for motion to kill every single aspect of financial reform. … You had earlier this week the Republican leader in the House and the senior Republican on the Senate committee go to the American bankers and promise them that they would use every parliamentary trick and every tactic not to make it better but to stop reform in its tracks. “So given that, [Sen.] Chris Dodd really did more than frankly I would have done if I were he to try and reach an agreement. But the republicans simply so locked into this alliance with the financial industry and the ideology that says never regulate — which even Alan Greenspan is repudiating — that there’s nobody to work with.” Frank has expressed some reservations about the proposal put forward this week by Dodd, the chairman of the Senate Banking Committee, particularly the concept of putting a new consumer protection inside the Federal Reserve. But Frank said today that it’s possible for such a unit to have the autonomy it would need to be effective. “It could and we have — it’s evolved from what it originally” would have looked like, Frank said. “Look, he was originally trying to make an arrangement with Senator [Bob] Corker. My understanding by the way was when he talked to Sen. Corker and he asked Sen. Corker how many Republican votes would come from the agreement with Sen. Corker, the answer was Sen. Corker. And that really wasn’t a lot to bring, as nice as Sen. Corker is. “But what we’re talking about is not simply where they’re paying rent in, effect, but how much independence they have. There’s an argument that says you can’t have an independent consumer agency, it has to be overrule-able by the bank regulators because it will endanger the safety and soundness of banks. It’s really a terrible argument to make on behalf of banks — namely that if they can’t gouge the consumers and play games with the payment date and retroactively raise rates on credit cards that somehow they can’t make a deal. … “So yes, where it physically is housed literally is less important than the scope of its powers and whether it’s truly independent. And Chris Dodd is making some very good strides, I think, in the right direction there,” Frank said. Frank also said he sees momentum for health care reform, but warned that “nothing is or ought to be preordained in a democracy.” Watch the interview with Rep. Barney Frank HERE. Also on “Top Line” today, we chatted with author Thomas Frank and director Joe Winston about the new documentary based on Frank’s book, “What’s the Matter with Kansas?” Watch that segment HERE.

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