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Banking on Barney Frank

Consumer advocates who cheered when Frank took over the powerful House Financial Services Committee now gripe that he's less than a corporate scourge.

| Wed Apr. 16, 2008 2:00 AM EDT
Last month, Massachusetts Congressman Barney Frank appeared at a Boston town hall meeting cosponsored by the Service Employees International Union, which has recently focused its attention on the business practices of the nation's largest banks. The event addressed the impact of such things as abusive credit card fees and arbitrary interest rate increases. As the chairman of the House Financial Services Committee, Frank oversees the banking industry, and he has cosponsored legislation that would rein in some of these credit card abuses. At the meeting, Frank spoke about the need for competitively priced banking services for working families, and was largely sympathetic to the folks assembled to tell their tales of debtors' woe. At the end of Frank's remarks, SEIU Local 509's president Mike Grunko asked him whether those gathered could take Frank's speech as "your commitment to get the credit card bill to the floor," according to the American Banker.

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Grunko's remark was intended to be far more lighthearted than the response he got from Frank, who replied somewhat icily, "I'm sorry you asked me that. I didn't come here to be asked questions about this…I filed that bill. I've been working for it and I really don't like the suggestion that I need you to tell me that I'll be true to my word." And then he left for another event, for which he was late. In an interview, Frank explains that he was indeed insulted by Grunko's question, largely because he'd just been talking about all the things he was doing on behalf of consumers and working families, and he thought Grunko's request for a "commitment" to do things he'd already been doing was unfair. "There was this implication that we can't be trusted," Frank says.

Frank's prickly closing of the town hall meeting was emblematic of his sometimes difficult relationship with consumer groups that want to put some constraints on the nation's enormous financial services industry. It's not the first time Frank has exchanged testy public remarks with people who generally consider him an ally in their fight to protect consumers from the practices of the largely unregulated banking and credit card industries.

Last fall, Frank appeared at the National Consumer Law Center's annual convention in Washington, speaking to a group of several hundred consumer lawyers who are on the frontlines of the nation's foreclosure crisis. For 12 years, Republicans had largely ignored these folks, and consumer protection issues in general, so Frank's appearance was a major improvement. But the lawyers seized the opportunity to yell at Frank for the work he was doing on a bill to combat predatory lending that they believed was insufficiently proactive. True to form, Frank yelled back.

For his part, Frank says he thought the lawyers were far more interested in preserving the right to sue after something happens than preventing the problems associated with predatory lending in the first place, which he thought his bill was attempting to do. "I was very unimpressed with that group," he says.

Frank's occasional public dustups with consumer groups are akin to the problems that Al Gore had with environmentalists when he was vice president: It's an issue of expectations. Consumer advocates were thrilled when Frank ascended to the chairmanship of the powerful banking committee in 2007, after the Democrats regained the House in the 2006 election. Republicans were horrified. Frank had been a staple of GOP fundraising materials in 2006, when Republicans warned darkly that if the Democrats regained control of the House, Frank, a fire-breathing gay liberal from Massachusetts, would end up in control of the banking committee and, of course, the world would come crashing down on corporate America.

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