Former Rep. Barney Frank rejected concerns voiced by other Democrats that a Senate bill rolling back some provisions of the Dodd-Frank Act will fuel another financial crisis.

"Nothing in this bill in any way weakens the prohibition about making shaky loans to people with weak credit and then packing them into a security," Frank, a Massachusetts Democrat, told the radio station WBUR in Boston on Monday. "Frankly, I think there is less here than meets the eye."

Frank's comments came as senators are moving swiftly to pass targeted reforms of the post-crisis law that the former congressman co-authored with former Sen. Chris Dodd, D-Conn. The regulatory relief bill sponsored by current Banking Committee Chairman Mike Crapo, R-Idaho, appeared headed for a Senate vote this week.

Rep. Barney Frank, D-Mass., and Sen. Chris Dodd, D-Conn., in 2010
The comments by former Rep. Barney Frank, D-Mass., came as senators move swiftly to pass targeted reforms of the post-crisis law that he co-authored with former Sen. Chris Dodd, right. Bloomberg News

Frank said he supports two main changes to Dodd-Frank, in particular, as proposed in the Crapo bill: relaxing compliance rules for financial institutions under $10 billion and raising the asset threshold for "systemically important" financial institutions to $250 billion from $50 billion.

He noted that he "greatly disagreed" with criticism by other Democrats that the regulatory relief bill would lead to another financial crisis.

"I think that is a misreading," of the bill, Frank said. "The bill does allow the regulators that do the extra scrutiny to reach a bank that has less than $250 billion in assets if they think they should."

He said the changes to Dodd-Frank will "only marginally" boost the economy by easing regulations on midsize and regional banks.

"The banks that are between $50 billion and $250 billion, it will give them a better chance of competing with the biggest banks," Frank said.

But most of the regulatory regime set in place by Dodd-Frank will remain intact, he said.

"They're not weakening the rules about derivatives, they're not weakening the rules on mortgages being packaged into a security," he said.

Yet Frank suggested he agrees with criticism about a provision in the Crapo bill that would give small banks an exemption from providing data that is meant to protect borrowers from racial discrimination in housing.

Banks that originate less than 500 open-ended and 500 closed-end mortgages would be exempt from the Home Mortgage Disclosure Act. Dodd-Frank originally required all institutions that originated just 25 home loans to report HMDA data.

The change would exempt roughly 3,700 depository institutions, or 66% of all banks, from requirements to collect and report expanded HMDA data, according to the Federal Reserve.

"I think I was one of the first to make the complaint about making it harder to get data on racial discrimination in housing, under what we call HMDA," Frank said.

Earlier this month, Frank wrote an op-ed for CNBC in which he more clearly highlighted his own criticism of the Senate reg relief bill.

"While I share the view of many of the pro-reform Senate Democrats who have accepted this package that responding to the concerns of small and midsized banks has both substantive and political arguments in its favor, I believe that the price the Republican colleagues are demanding is too high," Frank wrote in the op-ed.

The bill is the culmination of negotiations between Crapo and moderate Democrats.

Frank has criticized Sen. Elizabeth Warren of Massachusetts, who publicly called out fellow Democrats who sided with Republicans in support of the bill.

"I think some of the criticisms Sen. Warren makes are very, very accurate, and I agree with them," Frank said in the radio interview. "I think it is legitimate to disagree with [lawmakers siding with Republicans], but to attack them? I think it's a mistake to suggest that people should be less supportive [of] these senators, given this is the only deviation they are making from a generally solid line of protection against Trump."

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Kate Berry

Kate Berry

Kate Berry covers the Consumer Financial Protection Bureau for American Banker.