Rep. Barney Frank (D-Mass.), chairman of the influential House financial services committee, says he’ll continue to fight for an independent consumer-protection agency as part of this year’s comprehensive financial-reform legislation, and that he opposes housing a consumer agency within the Federal Reserve, a plan that recently emerged from the Senate’s ongoing negotiations. “My main objection to housing this critical function in the Federal Reserve has been the central bank’s historical failure to implement consumer protection as a central part of its mission and role,” Frank said in a statement today.
The Massachusetts congressman recently told Mother Jones that an independent consumer-protection agency was a “dealbreaker” for him. He also said an earlier plan leaked out of the Senate—where the banking committee’s chair, Sen. Chris Dodd (D-Conn.), is leading the talks—to put a consumer agency within the Treasury Department was “weaker than I was hoping.” Frank told Mother Jones recently that he’d rather see Senate Democrats push for a stronger financial-reform bill, and let Senate Republicans try to vote down that bill in public, rather than make early compromises in closed-door meetings.
Here’s Frank’s statement in full from this morning, which he issued to clarify comments in today’s New York Times:
I do not support housing the Consumer Financial Protection Agency in the Federal Reserve. I continue to vigorously support the House-passed bill that establishes an independent agency with strong rule-writing authority and enforcement powers to implement consumer protections. I could, if necessary, support housing this important function in the Treasury Department, provided that the entity has sufficient independence and broad regulatory scope to accomplish the mission of protecting consumers.
My main objection to housing this critical function in the Federal Reserve has been the central bank’s historical failure to implement consumer protection as a central part of its mission and role.