WASHINGTON — The surprise announcement Monday by long-serving Rep. Barney Frank, D-Mass., that he won't seek re-election to the House of Representatives will give opponents of new financial regulation more room to seek a rollback of important curbs on big banks and powerful financial firms.
The change atop the Democratic side of the powerful House Financial Services Committee also will heat up a controversy over the other top members of the 61-person panel, which makes laws governing banks and Wall Street. Only the Armed Services Committee has more members.
Frank, 71, surprised Washington by announcing that he won't seek his 17th term, citing redistricting that added 325,000 new constituents to his district, which he said would have forced him to raise up to $2 million more in campaign money and to campaign hard in an area he's never represented. He also said that the way politics has evolved in Washington led him to believe that he can be a more effective advocate outside of Congress than inside it.
Frank, a perpetually rumpled, acerbic and quick-witted debater, is one of the more popular Democrats in Congress, and was one of the first lawmakers to announce openly that he is gay. As President Barack Obama said in issuing a statement of praise upon Frank's announcement: "This country has never had a congressman like Barney Frank, and the House of Representatives will not be the same without him."
Until Republicans took over the House after their 63-seat gain in the 2010 elections, Frank headed the committee and shepherded landmark legislation to rein in Wall Street that bears his name, shorthanded now as the Dodd-Frank Act. The bill's other sponsor, Sen. Christopher Dodd, D-Conn., retired at the end of the last Congress.
Frank's departure will draw more attention to a panel already in the spotlight for alleged ethics lapses on both sides of the aisle.
The Financial Services Committee is now chaired by Republican Rep. Spencer Bachus of Alabama. Bachus was targeted in mid-November published reports that he'd made lucrative stock trades during the 2008 financial crisis based on private information received in briefings from Federal Reserve Chairman Ben Bernanke and then-Treasury Secretary Henry Paulson.
And the lawmaker in line to replace Frank on the committee's Democratic side suffers a similar tarnish. Rep. Maxine Waters, D-Calif., is an unabashed liberal and fiery critic of the banking industry, but she's dogged by allegations that she peddled influence on behalf of a bank that had ties to her husband. Her case was reviewed by the House Ethics Committee but remains unresolved because of partisan infighting.
Several other veteran Democratic committee members hold bank-regulation attitudes like Frank's, including Rep. Carolyn Maloney of New York and Rep. Mel Watt of North Carolina. That's important because Republicans are preparing efforts to roll back parts of the Dodd-Frank Act, including weakening the newly created Consumer Financial Protection Bureau.
"I look at the senior Democrats and I don't see major differences in policy," said Travis Plunkett, government policy director for the Consumer Federation of America. "I see across the board a strong commitment to consumer protection and a rigorous but fair financial regulation."
Still, the outcome of next year's elections will affect how regulators write many complex rules that are still being implemented from the 2010 legislation. And Frank was a tireless defender of the sweeping rewrite of Wall Street regulation. He exits at a crucial time.
"A hostile Congress can effectively gut strong laws. This is a very important phase and they can do a lot of damage, they can send a message without ever changing anything," said Plunkett.
Yet if the House remains in Republican hands after next year's elections, as widely expected, the determining factor on any bank-law rollback may be the Senate.
"I think the fight there will be in the Senate. The Republicans have the votes in the House. Barney Frank's departure isn't going to change that," said Douglas Elliott, a research fellow in economics for the Brookings Institution, a center-left think tank. "I personally don't think Dodd-Frank will be rolled back very much."
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