Barney Frank predicts ‘no further change’ to Dodd-Frank after bipartisan rollback

Former Rep. Barney Frank (D-Mass.) said in an interview to be aired Wednesday that the financial regulation law bearing his name is unlikely to be loosened by Congress again.

Frank, co-author of the 2010 Dodd-Frank Wall Street reform law, told the ‘Marketplace‘ radio show that Democrats no longer face pressure to roll back the measure after President Trump signed in a bipartisan bill May to exempt dozens of banks from its strictest requirements.

Frank and his co-author, former Sen. Christopher Dodd (D-Conn.) spoke to Marketplace on Sept. 12, three days before 10th anniversary of the collapse of Lehman Brothers. The full interview is scheduled to air Wednesday morning.

As chairmen of the House Financial Services and Senate Banking committees respectively in 2009, Frank and Dodd led the Democratic charge to impose tougher rules on banks to prevent another debilitating crisis.

Frank said that the “fairly small change” to the law signed by Trump would be “the last change that’s going to happen.” He argued that the successful loosening of the law took pressure off of moderate Democrats to support further changes.

“It changed the political dynamic,” Frank said. “The Democratic senators who pushed for that now feel totally secure in not having to support any other change, and there will be no further change to [Dodd-Frank.].

Frank and Dodd both endorsed the rollback effort at the time, calling it a sensible fix for smaller financial firms that protected strict rules for major banks.

Republicans touted the Dodd-Frank rollback as crucial regulatory relief, but the effort fell far short of Trump’s promise to “dismantle” the law. Changes to Dodd-Frank could only clear the narrowly divided Senate with Democratic support, which stifled GOP hopes of drastically weakening the law.

Critics of Dodd-Frank are unlikely to make another dent in the law through legislation unless Republicans manage to secure the House and a two-thirds majority in the Senate under Trump.

Even without legislation, regulators are moving forward with plans to loosen several Dodd-Frank rules. Five federal agencies are considering a proposal to clarify and narrow the scope of the “Volcker Rule” ban on banks making risky bets with their own capital.

The Federal Reserve is also reviewing plans to loosen two safeguards meant to financial titans from excessive risk: the enhanced supplementary leverage ratio and a surcharge applied to the biggest bank holding companies.