Rep. Frank: Goldman charges improve chances for reg reform
Frank, the chairman of the House Financial Services Committee, said that allegations of fraud against Goldman that were leveled late last week bolster the political case for reform legislation as it begins to make its way before the whole Senate.
“It does, although I thought they were pretty good anyway,” Frank said when asked whether the charges improved the chances for financial reform’s passage during an appearance on CNBC.
“It reinforces the need for much of what we were doing,” he said also during his appearance.
Frank said, though, that he believed the charges filed Friday by the Securities and Exchange Commission (SEC) weren’t timed with politics in mind in order to bolster the case for reform.
Democrats and Republicans on Capitol Hill sought to spin the charges against Goldman, which allege the company deceived consumers in the sale of one of its financial instruments.
Democrats say the charges only underscore the need for their reforms, while Republicans argue that the charges undercut Democrats’ case for reform, because of the millions in donations that leaders in Congress and President Barack Obama received from Goldman employees in the last election cycle.
Frank’s bill has already made its way through the House, but is awaiting Senate action before the two bills can go to conference before heading back to each chamber for a final vote.
Sen. Chris Dodd (D-Conn.), the chairman of the Senate Banking Committee, will address the future of his bill in the Senate during a press conference Monday morning.
A major sticking point in the legislation is a $50 billion fund financed by the banks to help aid with failed firms in the future, which the GOP says is a continuous bailout fund that keeps “too big to fail” institutions in place.
Frank signaled that such a provision may be removed easily if it is the only obstacle to winning Republican votes.
“If that were the only obstacle, I don’t think it will survive,” he said. “The test, then, will be of the Republican leadership, whether they are just kind of following a total deregulatory theory.”