House Financial Services Committee Chair Barney Frank, who pushed the House's financial reform legislation to passage last fall, just spoke to me about the reported compromises being negotiated by Senate Banking Committee Chair Chris Dodd, who is trying to reach a deal to gain Republican support for an effort to overhaul financial regulation. Frank expressed concerns about the structure of the Consumer Financial Protection Agency and called for a Senate vote on the bill, saying he wouldn't support bringing a weakened bill back to the House."I don't like it. On the consumer agency think it is much too weak; when I heard it would be lodged in the Federal Reserve, I thought it was a bad joke," Frank says. "The limitations over the powers, and the [exclusion of] pay day lenders -- I'm not happy with what I've seen so far. I would hope before anything like that happened that they might actually have a vote in the Senate on a better version. Talk to Elizabeth Warren, she's not happy with what she hears either."
Frank said that he would want to try and strengthen a Senate bill rather than vote to weaken the legislation his chamber passed last December.
"If the Senate were to send us what I've seen so far, I wouldn't bring it it to the House [floor]," Frank says. "I'd insist on some House-Senate conversation, especially if the Senate doesn't have a vote. I would not recommend to the Speaker that we take it up in the House. I would want some negotiation to toughen it."
Dodd has been seeking Republican votes to avoid a potential filibuster on the floor of the Senate, but many question whether the Republicans could afford to obstruct a bill to restrict the banks with so much public anger against Wall Street. Frank believes that Senate leadership should call the GOP bluff.
"Republicans may have the power to filibuster to death a legitimate consumer agency, but I think they should be put to the test. I don't think they they would do that," he says.
Frank, who expressed concern about other parts of the bill, including resolution authorities for failing financial institutions, said he was awaiting further detail on the Senate plan and intended to speak to Dodd later tonight about the reform effort.
-- Tim Fernholz
