Frank confident his law to survive
WASHINGTON — President Donald Trump vowed to do a “big number on” the banking law enacted after the financial crisis a decade ago, but the law’s co-author and namesake says he’s confident that the essence of Dodd-Frank will survive Republican efforts to dismantle it.
“It’s much better than where I thought we would be,” former Rep. Barney Frank of Massachusetts, D-Mass., said recently.
Frank sounded rather pleased that whatever happens this year, the Dodd-Frank act will live on. The Republican-controlled House passed legislation to dramatically scale back the government’s oversight role, but it has no chance of passage in the Senate. The Senate bill, a bipartisan measure, is decidedly more modest. Republican leaders from the two chambers are now trying to work out a compromise that can pass both chambers and get to the president’s desk before November’s midterm elections.
To be clear, Frank said he would have voted against both versions. But he considers the Senate bill an “affirmation” of most of Dodd-Frank.
Dodd-Frank, which Frank crafted alongside Sen. Christopher Dodd, D-Conn., boosted government oversight of banks in a bid to reduce risk and prevent another financial meltdown like the one in 2008. At the urging of banks, credit unions and other financial institutions, Congress is seeking easing some of the regulatory requirements the bill created.
The chief feature of the Senate bill is that it would shrink the number of banks that received extra government monitoring because they are deemed so important to the economy. The bill raises the asset threshold at which banks must comply with stricter capital and planning requirements, including yearly stress tests and developing “living wills” for an orderly liquidation in times of crisis.
Frank said the current threshold, $50 billion, “really was too low.” He said he prefers $125 billion and indexed to grow with inflation.
Frank now serves on the board of Signature Bank.