The Republicans say Dodd-Frank doesn't do enough to ban bailouts. Some say we should have gone further to break up the banks.
I've asked them to what size. If you are going to have nothing that's too big to fail, then nothing can be as big as Lehman Brothers.
Lehman Brothers created this crisis. So no financial company in this country can be as big as Lehman Brothers used to be?
What's the right size? And by what method do you break them up? You say, "Oh, let's sell things off," well what a great fire sale that would be. First place, who are the buyers? They are each other's buyers.
I can't see any evidence that size alone was the problem. Canada is of course dominated by a handful of big banks, but with the right regulations, never had this problem.
There is this incredible idea that if there is a big crisis and Citicorp, Bank of America, JPMorgan, Goldman are about to go under, there will be overwhelming pressure on the administration to bail them out.
In what country do these people live?
There would be overwhelming pressure not to do anything for them. I mean, maybe in 10 years it would be different, but in America, today, with the American public the way it is?
Tarp is the most unpopular successful program in American history. This notion that there is going to be pressure for the government to go to the aid—it's just insane. It's totally opposite from where the political system is today.
They say when the chips are down, Congress will give someone an out. You just don't see it?
They have no idea what Congress would do, including some of these guys who were there. We were barely able to get the Tarp through.
That's just the worst political misreading that I could think of.
We do acknowledge that there are some institutions that are too big to be allowed to fail without any attention to the consequences. But we pay attention to the consequences and the institution's gone.
The analysis just isn't even close. The quality of the arguments are very weak.
GSEs. You worked closely with Oxley on a bill in 2005 and supported it. But when it finally came up for a house vote, you opposed it.
That's right. He agreed to incorporate the low-income trust fund. When the bill left committee, it had a good low-income trust fund.
In the Rules Committee, they amended the bill to exclude from participation in the low-income trust fund any organization whose mission was not wholly housing. That was an ACORN thing.
They wouldn't give us an amendment.
Among the institutions that was then told they couldn't participate was the Catholic Church, because their mission includes other than housing.
So that's why I voted against the final bill. Because the bill I voted for on the floor (I think he means in committee) had been amended to cripple the low-income trust fund.
It's caused you some grief since then. Do you regret that vote?
No. But that bill didn't pass anyway. If anybody had paid attention, that's the bill that Bush repudiated.
I voted against it and the bill passed anyway. That's the point I was making. I wasn't making policy then. The bill passed anyway and it was Bush and the Senate Republicans that killed it.
If you search your name on Google it will come up with "Barney Frank caused the housing crisis." Does that frustrate you?
Yeah, that misreading of history. I became very prominent because of 2007, so the number of people who know that I didn't become chairman until 2007 and impute responsibility to me for the earlier period, yeah it's a little frustrating, but so what?
I think the other thing is that people don't differentiate. There's that quote from me about "rolling the dice." If you read that, it's about multi-family housing. And that's also frustrating to me. I was always a rental guy, not a homeownership guy. And they had a great record. The multifamily portfolio never lost money. It was very successful.
Yes, I think we should have pulled the plug earlier. The best answer I can give you is that as soon as I could, we did.
The other day you put out a statement on government lawsuits against JPMorgan. I find it interesting you put it out, because as far as I can tell, nobody asked you for your opinion on it.
No, and in fact I made a point of not talking to either [JPM's Jamie] Dimon or [BofA's Brian] Moynihan.
Look, I was there in 2007 when they were doing that. I wasn't a direct participant putting the pressure on JPMorgan Chase, but I was there and I was helpful, I was supportive of it.