Rep. Frank Expresses Disappointment In Productivity Of Congress, To Retire In 2012

Rep. Barney Frank, D-Mass, has announced he would not seek re-election next year after serving in the U.S. House of Representatives for more than three decades.

Frank said in a press conference he faced a tough re-election campaign and "had a hard time justifying to myself to do it." He said he thought his work in Congress would not be as productive going forward as he would hope.

"To my disappointment, the leverage you have within the government has substantially diminished," Frank said, adding he does not intend to serve as a lobbyist.

Frank serves as the ranking Democrat in the influential House Financial Services Committee and has been an influential player in some of the most contentious battles on Capitol Hill. Frank was instrumental in the passage of the financial bailout a few years ago.

Once Frank's retirement becomes official, Rep. Maxine Waters, D-Calif., will become the ranking Democratic member on the House Financial Services Committee. Waters has been a key figure in the ongoing debate over how to fix the National Flood Insurance Program but has often drawn fire from conservatives on financial issues (Best's News Service, July 13, 2011).

Frank also co-authored the Dodd-Frank Act, which is among the most influential bills to come out of Congress in recent years that affected the insurance industry. Dodd-Frank created the Financial Stability Oversight Council and the Federal Insurance Office, which are both expected to have a significant impact on the industry in the coming years.

Earlier this year, Frank addressed a number of insurance industry issues during remarks at the National Press Club in Washington, including remarks that criticized the Obama administration for moving too slowly in appointing insurance regulators to the FSOC.

Former Illinois Insurance Director Michael McRaith, an ex officio nonvoting FSOC member, took office June 1. Missouri Insurance Commissioner John Huff and former Kentucky Insurance Commissioner Roy Woodall also have nonvoting posts on the FSOC.

FSOC is establishing criteria to be used in determining when institutions, potentially including insurance companies, should be designated as systemically important financial institutions. Those designated will be subject to heightened supervision and required to maintain detailed resolution plans to show they would be able to resolve themselves through bankruptcy if their fortunes spiral down.

Frank dismissed criticism that SIFI designations could enshrine "too big to fail" by promoting a taxpayer-backed bailout. In fact, all financial services entities that could potentially be considered for such designation are "vehemently" opposed to the restrictions it would bring, he said.

"You've heard of the gift that keeps on giving. This is the gift that people keep on refusing," Frank said (Best's News Service, July 11, 2011).

(By Jeff Jeffrey, Washington Correspondent: jeff.jeffrey@ambest.com)