Rep Frank: US financial consumer agency needs work

July 21, 2009

WASHINGTON, July 21 (Reuters) – The Obama administration’s proposal to form a U.S. Consumer Financial Protection Agency needs more work, Representative Barney Frank, chairman of the House Financial Services Committee, said on Tuesday.

“There’s more work to be done. I don’t know where the votes are. The banks have done some lobbying. I think it needs to be refined,” Frank told reporters after a hearing.

The committee said earlier in the day that it had postponed until September a session to draft and vote on the proposal.

The panel also postponed until next week a session that had been scheduled for Thursday to draft and vote on an administration measure to curb executive compensation.

“The leadership, I think, may want to put (executive compensation) on the floor. So we have to give a little more attention to that,” Frank said.

He added that it was “overwhelmingly likely” that a bill will be offered in Congress to repeal legal requirements that now require usage of the services of credit ratings agencies.

“There are a lot of statutory mandates that people have to rely on credit rating agencies. They’re going to all be repealed,” he said.

In addition, he said that upcoming legislation on regulating over-the-counter derivatives markets would probably contain a provision to ban “naked” credit default swaps.

“That’s our current inclination. There’s some opposition to that … But that’s where we are, yes,” Frank said, echoing comments from earlier in the day by Representative Collin Peterson, chairman of the House Agriculture Committee.

Frank also said a bill on OTC derivatives regulation would be an issue for Congress to deal with “in the fall.”

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