Despite more than 2,000 pages in legislation aiming to regulate Wall Street, Massachusetts Congressman Barney Frank said the legislation doesn’t do enough to limit foreclosures.
Part of the reason, according to Frank, co-author of the Dodd-Frank Wall Street Reform and Consumer Protection Act, is partisan meddling.
“Go tell a Republican,” Frank said at the University of New Haven on Thursday to a crowd of bankers and Realtors. “You have people now who say you got to cut the deficit, you got to stay in Afghanistan, we got to stay in Iraq, you can’t raise the taxes on Warren Buffet and you have to cut the crap out of everything else.”
Frank, chairman of the commission overseeing the banking industry from 2007-11, oft cited Republican opposition as the reason for a lack of legislation that would curb foreclosures of homes.
In Connecticut, 26,510 foreclosure cases were filed in the 2010 fiscal year, according to the state’s judicial branch. In the fiscal year of 2009, there were 24,973 homes in a similar situation.
“Obviously, the foreclosure mitigation programs do not work very well,” Frank said. “Probably it’s because we missed the opportunity to write them in [the Dodd-Frank legislation], and secondly because the ideological opposition on the part of the Republicans.”
The far-reaching legislation, co-authored by Connecticut’s former U.S. Sen. Chris Dodd, was created in response to the economic collapse of 2008. It deals with the amount that banks can invest and the fees credit card companies hit retailers with, among other financial matters.
The law, which was signed into effect July 2010, also created a council of regulators to oversee the finance industry.
“We’re in this mess that we’re in because we didn’t have any of [these regulations],” Frank told a banker. “This is not where somebody said, ‘You know what, I’m bored, let’s go regulate all these people.’ What happened was the economy damn near collapsed.”
At the meeting in the university’s campus center, Frank was joined by fellow Democratic congressmen, U.S. Rep. Rose DeLauro (D-3) and U.S. Rep. Joe Courtney (D-2). The Connecticut politicians decried the excesses of the banks that took costly risks in unregulated derivatives that turned toxic, and praised efforts like Frank's to regulate the industry.
“The [collapse] was brought about, in my view, among other things, by greed, corruption, excessive debt and leverage, a lack of regulation of the big financial institutions,” DeLauro said. “The economy is still dealing with the ramification of that collapse today. Millions of jobs have disappeared. Millions of homes have foreclosed.”
According to Courtney, Frank’s 2,000-plus pages of legislation is flawed but necessary.
“Nobody, when Dodd-Frank passed, believed that it was an absolutely perfect creation,” he said. “There is no such thing…but the bottom line is if we don’t get some transparency and balance into some of these markets…this economy is going to be affected.”