Frank: Financial Overhaul Won't Be Gutted By GOP

This has been a big year for the financial services industry, especially in July, when Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act to reform Wall Street. Next year will reveal how regulators implement its provisions, and how Republicans — who now control the U.S. House — will deal with the legislation.

When the new Congress begins in January, Republican Spencer Bachus, R-Ala., will take over as chairman of the House Financial Services Committee. Bachus will replace Massachusetts Rep. Barney Frank.

Speaking with WBUR's Bob Oakes in Washington, Frank doubted that Republicans would seek to negate the newly created Consumer Financial Protection Agency.

"I think they understand that tougher regulation on financial shenanigans, consumer protection, banning the bad mortgages, those are all too popular to take on," Frank said.

"We passed the most important set of consumer protections in American history. I don't think they are going to try to undo the Consumer Protection Agency to put back the Wild West regarding credit cards or overdraft or sub-prime mortgages."

Frank said that Republican threats are more rhetoric than reality.

"I will predict to you now that they will not be pushing for votes on undoing the Consumer Protection Agency," Frank said. "I cannot think of a single part of that bill, where in the end, they are going to try and change it, and frankly from the standpoint of electoral politics, I wish they would."

Nonetheless, there is the possibility the consumer agency would be underfunded.

"There is a danger that two agencies which rely on appropriated funds — the Security and Exchange Commission and the Commodity Futures Trading Commission — that they may not give them enough money to carry out the new responsibilities we gave them," Frank said.

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