Bank-reform author, Barney Frank, bows out

WASHINGTON (MarketWatch) — Rep. Barney Frank, a longtime Democratic lawmaker from Massachusetts and co-author of the landmark Dodd-Frank bank-reform law, announced Monday that he won’t seek re-election in 2012.[I am sorry to read this.]

Frank, 71, plans to formally announce his plan to retire at a press conference at a 1 p.m. in Newton, Mass., in the district he’s represented since he was first elected in 1980. [Frank has dedicated 30 + years to the public as an advocate for the regular everyday person. We need young people with vision and grit to take the helm.]

Reuters U.S. Representative Barney Frank at a Washington event in March. Frank is announcing his retirement.

Frank is the ranking Democrat on the House Financial Services Committee. He was chairman of the panel between 2007 and 2011, during which time he oversaw his most lasting legislative legacy — shepherding through the sweeping bank-reform legislation that bears his name.

His efforts to reform the banking sector in the wake of the financial crisis of 2008 were backed enthusiastically by consumer groups and other Democratic institutions and derided by Republican critics.

“Because he’s such a colorful figure — smart, quick-witted, sharp-tongued — it is easy to focus on that public persona,” said Consumer Federation of America director Barbara Roper. “But look past the surface, and you’ll find one of the most effective legislators we’ve seen in recent years. And, despite the barbs that are aimed at him by the right, he is effective precisely because he knows when and how to make the deals that are necessary to win a bill’s passage.”

As co-author of the crisis-reform legislation, Frank was a key supporter of the creation of the Consumer Financial Protection Bureau, a new agency charged with regulating mortgages and other consumer credit products.

[If anything, this didn’t go far enough, but the currently elected Republicans haven’t done anything but block progress and consumer protections. Our elected officials are being paid off by big money interests to the great disadvantage of the general public who is suffering at this time.]

He also was heavily involved in the provisions seeking to set up a new process to dismantle big failing Lehman-like banks to limit the impact of their collapse on the markets.

Proponents argue that the measure ends the problem of mega-bank failures while Republicans and other opponents insist that it enshrines the existence to too-big-to-fail banks, giving them credit advantages over the rival.

Frank has been an outspoken critic of Republican efforts to in the House to delay approval of rules he helped create for the $450 trillion derivatives industry.

His departure sets the stage for Rep. Maxine Waters of California to take the helm as the most powerful Democrat on the House Financial Services Committee.

Frank said he believed that packaging and selling mortgage securities was critical to the housing market. However, he also was a key advocate for a provision in the legislation to ensure that banks have “skin in the game” through retaining 5% of risk on loans that they package and sell. At a recent press conference, Frank raised concerns about efforts to dismantle the provision. Read about Frank firing back at critics of the Dodd-Frank bill

“There is an assault right now on risk retention,” Frank said in July.

With Frank gone, neither of the two main authors of the Dodd-Frank act will remain in Congress. His Dodd-Frank partner, Sen. Christopher Dodd, left Congress in January and is now the chief lobbyist for the Motion Picture Association of America. Dodd was first elected to Congress in 1981.

Ronald D. Orol is a MarketWatch reporter, based in Washington.