WASHINGTON — Rep. Barney Frank and Massachusetts Senate hopeful Elizabeth Warren warned Thursday that Republicans will roll back key parts of the Dodd-Frank Act if the GOP sweeps the November elections.
In a conference call with reporters, Warren focused on her opponent, Sen. Scott Brown, arguing he helped to water down provisions of the regulatory reform bill prior to its enactment in 2010.
"He pushed to weaken the Volcker Rule during negotiations" on the bill, Warren said. "Sen. Brown was given the name 'one of Wall Street's favorite senators' by Forbes. There is a reason for that. Sen. Brown has been out there delivering for Wall Street."
Frank, meanwhile, appeared more concerned on what a potential Republican takeover of the Senate could mean for the law that bears his name. The lead Democrat on the House Financial Services Committee — who will retire this year from the Massachusetts delegation — said that if Republican Sen. Richard Shelby controls the Banking Committee, he would act on bills that threaten the independence of the Consumer Financial Protection Bureau and reduce the budget of the Commodity Futures Trading Commission.
"If Republicans are able to control the Senate and hold on to the House, then the financial reform bill is in jeopardy," Frank said.
Both Warren and Frank blamed Republicans for a provision in Dodd-Frank that prevents the Federal Deposit Insurance Corp. from assessing financial institutions ahead of time for the possible failure of a systemically important firm. Instead, the final law allows the FDIC to borrow from the Treasury Department to unwind a firm, and then assess banks after the fact.
"Brown insisted we take the $20 billion off the backs of financial institutions and put it on the taxpayer," Frank said. "Brown believes the cost of administering financial reform — the cost of any wind-down — should come from the taxpayer and not the financial institutions."
But Brown was hardly alone. In 2010, the Senate overwhelmingly rejected the creation of a fund ahead of time, with Republicans successfully arguing it was a "bailout" fund.
Brown was one of only three Republican senators to support the final version of Dodd-Frank, and his vote was essential to the bill's passage.
Warren, who first proposed the idea of the CFPB, has made regulatory reform a top platform of her campaign, arguing it must be defended from bank lobbyists that are working to strip it down.
On Thursday, she cited testimony this week from JPMorgan Chase Chief Executive Jamie Dimon on his firm's $2 billion trading loss as proof that the banks did not learn from the 2008 financial crisis.
"In the last two weeks, it's become clear: Wall Street just doesn't get it," Warren said. "This was clear in Jamie Dimon's attitude. 'Hey, $3 billion in losses — no big deal.'"