Banking Lobby Faces 'Serious Problems' in Washington: Barney Frank

NEW YORK ( TheStreet) -- Banks face "serious problems" in Washington in the coming Congress, according to Rep. Barney Frank (D., Mass.), stepping down after a more than 30-year tenure in the House of Representatives.

Frank, one of the key legislators behind the contentious 2010 Dodd-Frank financial services reform legislation when he led the House Financial Services Committee, was referring to Rep. Jeb Hensarling (R., Texas), who will take over leadership of the committee when the 113th Congress begins in 2013. Hensarling will replace Rep. Spencer Bachus (R., Ala.), who has already served the maximum six years he is permitted as either chairman or ranking minority member of a committee under Republican party rules.

Frank called Hensarling "very very far to the right and I don't think sustainable," in an interview with Bloomberg television over the weekend.

"I don't think the people in the financial community would be very happy if he was making policy with regard to the Federal Reserve -- with regard to international cooperation with regard to international financial institutions. So I think they're going to have some serious problems there, including by the way I read people in the financial community -- Lloyd Blankfein, Jamie Dimon -- who say 'Yeah we need some regulation.' They don't agree with all of it. I think he is a throwback to the days of irresponsibility."

A call to Hensarling's office wasn't returned. A spokeswoman for JPMorgan Chase ( JPM) where Dimon is Chairman and CEO, declined to comment. A spokeswoman for Goldman Sachs ( GS), where Blankfein serves those roles, did not respond to an email inquiry.

Frank was also sharply critical of the Financial Services Roundtable, a bank lobbying organization whose membership includes many of the largest U.S. financial services companies, including Bank of America ( BAC), Citigroup ( C), and JPMorgan.

"The Financial Services Roundtable made an incredibly bad decision by hiring a very partisan Republican, former Minnesota Governor Tim Pawlenty to head the Financial Services Roundtable. He had every right to run for President but he ran to the right of Mitt Romney. For example he said things about about the Federal Reserve that I think were irresponsible. Well I don't know how the Financial Services Roundtable is going to expect the Federal Reserve to totally forget what they said. I think most business people think what the Federal Reserve has done in coping with this problem has been pretty good. Ben Bernanke is after all a Bush guy."

Pawlenty told CNBC in 2011 of Bernanke that "I opposed his appointment last time, so it wouldn't be hard for me to oppose his reappointment next time, and I don't think he should continue in that position."

A spokeswoman for the Financial Services Roundtable responded with the following emailed statement from Pawlenty.

"I wish Congressman Frank well in the next phase of his career.  As a former Governor and legislator, I have a record of effectively working in a bipartisan and constructive manner, and  I am committed to upholding the Roundtable's bipartisan tradition with legislators and regulators as its new leader," the statement read.    

Wells Fargo ( WFC) Chairman and CEO John Stumpf is Chairman-elect of the Roundtable. A bank spokesman declined to comment. A Federal Reserve spokesman declined to comment.

An email to the press office of The Allstate Corp. ( BAC) whose CEO, Chairman and President, Tom Wilson, is also Chairman of the Roundtable, wasn't returned.

During the interview Frank also referred to the Troubled Asset Relief Program (TARP), the best-known of various government programs to bail out the financial system following the 2008 mortgage crisis, when asked about as his "toughest moment as a lawmaker."

Frank argues TARP "will go down in history as most highly successful highly unpopular program in American history."

-- Written by Dan Freed in New York.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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