Rep. Frank: New FDR-style New Deal Financial Regulations by Summer

A prominent Democrat made news on MSNBC Feb. 11 with his guarantee of new financial industry regulations “comparable” to FDR’s New Deal.

House Financial Services Committee Chairman Rep. Barney Frank, D-Mass., appeared on MSNBC’s “Rachel Maddow Show” Feb. 11 and told the MSNBC and Air America host that things should be done to limit what financial services can do, specifically when it comes to compensation.

“There’s no question about it for the future,” Frank said. “Look, there’s a problem with the American system and we as liberals should be honoring this. The principle that you don’t go back and do things retroactively is a very important liberal principle.”

Frank “guaranteed” there would be new regulations forthcoming.

“So some of the things the Bush administration let them do – we cannot undo,” Frank said. “We can prevent them from going forward, this I can guarantee you – we will very soon be adopting a set of regulations.”

As a powerful and influential member of the U.S. House of Representatives, Frank’s confidence there would be these new rules in place is a good bet. He said he specifically cited subprime lending and overleveraging by financial institutions as examples.

“We’re gonna be doing, essentially now, what Franklin Roosevelt had to do in the New Deal, what Theodore Roosevelt and Woodrow Wilson had to do around the turn of the last century. There’s a whole of new financial activity that’s gone on, that’s caused some damage, it’s done some good. But, it’s gone on without rules and uh, the one thing I am most confident about is we know how to stop this from happening again – banning the bad subprime loans, restricting the excessive kinds of leverage they’ve had.”

Frank said this would be on the front burner and predicted the new framework would be in place by summer. However, there are those who question Frank’s judgment on these matters, due to his resistance to regulate the two beleaguered government-sponsored enterprises Fannie Mae and Freddie Mac, and his potential conflict of interest regarding those institutions.

“This is a very high priority for us and I think by the summer, we’re gonna have a set of rules in place,” Frank said. “It’s going to be comparable, I think, to what FDR did with the New Deal – with the Securities and Exchange Commission and other rules. We will not depend on their goodwill. We will put some tough rules in place.”

MSNBC host Rachel Maddow’s show has slipped to the 12th place in the evening cable news show rankings with 1,240,000 according to the Drudge Report on Feb. 11 after a hot start. She acted surprised that Frank would come on and “make news” on her show.

“The House’s top banking overlord just said by this summer, he will create new regulations comparable to what FDR did with the New Deal,” Maddow reacted. “Right here – that just happened. I think we just made some news.”