Scotsman Guide > News > March 2018 > News Story

 Enter your e-mail address and password below.


Forgot your password? New User? Register Now.

News Archives

Subscribe icon Subscribe to our weekly e-newsletter, Top News.

Barney Frank: Senate bill doesn't threaten Dodd-Frank

Proposed federal legislation, S. 2155, which would roll back portions of the Dodd-Frank Wall Street Reform and Consumer Protection Act, has been moving toward a floor vote in the U.S. Senate this week. Former Massachusetts Congressman Barney Frank, one of the Dodd-Frank Act’s principal architects, discussed why he doesn’t view the bill, also known as the Economic Growth, Regulatory Relief, and Consumer Protection Act, as a major threat to the larger framework of the 2010 Dodd-Frank law. Frank served in the U.S. House of Representatives from 1981 to 2013.

What are your impressions of the Senate bill?

barneyfrankWell, it is mixed. If I were in the Congress, I would reluctantly vote against it. I like the idea of passing this and then, frankly, resolving the debate about the overall legislation. That could be the last thing [about Dodd-Frank] that could pass. The legislation [Dodd-Frank] is largely popular, but the political agitation for changing it comes from the community banks and their concern. Meeting their concerns would be fine. So the part of the bill that deals with the community banks I am all for. I don’t like the expansion of the exemption from reporting [under] HMDA. [The exemption, proposed under S. 2155, would exempt lenders originating fewer than 500 loans per year from recently expanded reporting requirements under the Home Mortgage Disclosure Act, or HMDA, a law designed to prevent discriminatory lending practices.] I think we should do nothing to relax our fight against racism, which continues to be a problem in America. 

The more controversial part is [raising the asset floor from $50 billion to $250 billion for a large banks to be included in the list of systemically important institutions subject to extra supervision by the Financial Stability Oversight Council, or FSOC]. I think [the asset threshold] should be $125 [billion to trigger FSOC oversight]. So, I would vote against it on those grounds. I would hope to try and change it. But, as far as [non-qualified] mortgages are concerned, I think allowing the smaller banks to make those loans as long as they keep them in portfolio is a perfectly good idea.

So you do not agree that this a major gutting of the work that you did?

Of course not. It does not change in any way the mortgage rules. Let’s start with that. Nobody will be able to make a non-QM [non-qualified mortgage] and securitize it, which is what led to all the problems. The problem didn’t begin until people started being able to securitize mortgages and evade the problem of the non-payment. It [S. 2155] doesn’t do a thing to lessen all the rules on derivatives. It [Dodd-Frank] exempts the small banks and local [banks] on derivatives anyway. It [S. 2155] doesn’t do away with orderly liquidation [a process established by Dodd-Frank to a liquidate a large, complex financial company that is close to failing]. It does not in any way, literally not one word of the Consumer Financial Protection Bureau [authorizing language] would change. So, literally, the only significant change it makes is raising the level at which you get into the supervision of the [Financial] Stability Oversight Council to $250 [billion].

Is there any portion of the proposed legislation that you support? 

I like exempting [small banks from] the Volcker rule [a provision in S. 2155 that exempts banks with less than $10 billion in assets from a ban on proprietary trading and investing in hedge funds and private equity funds]. Yes, I think accommodating the community banks is a good idea. It lets them function better, and it takes them off the warpath against the bill. Exempting them from the Volcker Rule and allowing them to make non-QM loans that they put in their portfolios, those are both fine.

Do you see any of the proposed changes advanced in the bill as presenting a major risk to the banking system?

I don’t think taking banks [with] $125 [billion] to $250 [billion in assets], and not subjecting them automatically to the FSOC, creates a major risk, no.  

What are the bill’s chances for enactment? It looks like it will pass the Senate.

Well, the problem is the House. The major problem still faced in the House is ... Republicans who hate Dodd-Frank and want to get rid of more of it. [U.S. Rep.] Jeb Hensarling, who is a very conservative chairman of the House Financial Services Committee, dislikes this bill [S. 2155] precisely because it doesn’t unravel the major bill [Dodd-Frank]. People have been understandably focusing on the arguments between the Democrats, but you are now going to have major pressure, a major fight in the House, between Republicans who want to vote for this bill and satisfy the smaller banks and the very ideologically motivated leadership of the [House] Financial Services Committee, who don’t want to pass this bill precisely because it will leave too much of Dodd-Frank intact.


Questions? Contact at (425) 984-6017 or

Get the latest news and articles from Scotsman Guide straight to your inbox.

Send me the following e-mails:

Learn more about Scotsman Guide e-mails

Thank you for signing up to receive e-mails from Scotsman Guide.

A confirmation e-mail has been sent to the address you provided.

For questions regarding your e-mail subscriptions please contact or call (800) 297-6061.

Fins A Lender Post a Loan
Residential Find a Lender Commercial Find a Lender
Follow Us:Visit Scotsman Guide Facebook pageVisit Scotsman Guide LinkedIn pageVisit Scotsman Guide Twitter page


© 2019 Scotsman Guide Media. All Rights Reserved.  Terms of Use  |  Privacy Policy