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The housing industry has lost an icon.
Barney Frank, who helped author one of the most significant regulatory overhauls since the Great Depression, died Tuesday of congestive heart failure at his home in Ogunquit, Maine. He was 86.
The liberal Democrat represented Massachusetts’ 4th District in the U.S. House of Representatives from 1981 to 2013. And while he will be remembered for many things — including being the first member of the House to voluntarily come out as gay — most people in the mortgage industry will associate his name with the eponymous Dodd-Frank Wall Street Reform and Consumer Protection Act in the wake of the 2008 financial crisis.
When the Dodd-Frank Act was signed into law in 2010, it established a series of rules and agencies with the aim of reducing systemic financial risk. Notably for the housing finance industry, it laid the groundwork for the Consumer Financial Protection Bureau (CFPB), which opened its doors in 2011.
Richard Cordray was the first head of the CFPB, growing it to a 1,600-person agency. He led the financial watchdog from 2011 until November 2017.
In a phone interview, Cordray told Scotsman Guide that Frank was a champion for consumers and a staunch defender of the CFPB.
In the aftermath of the 2008 financial crisis, Cordray recalled the challenges consumers were facing, citing the wipeout of people’s home values, huge unemployment and bank shutterings that were threatening financial markets.
“The CFPB was devised as a response to help settle all of that down and put things on a better path, which we did,” he said. “And we reformed the mortgage market. And a lot of that had to do with Congressman Frank’s ideas and thoughts that he put into the statute that helped us fix the mortgage market, fix the economic challenges at the time, and again, put the country on a better path and saved a lot of people’s homes in the long run as well.”
Scott Olson worked with the congressman for eight years as the housing policy director on the House Financial Services Committee, including through the financial crisis period.
Olson, who is now executive director of the Community Home Lenders of America, talked with Scotsman Guide about the reforms Frank fought to accomplish.
“He played an instrumental role in getting the TARP package passed at a time when the country was on the brink of economic collapse. And that was not easy,” Olson recalled, referring to the Troubled Asset Relief Program, which authorized $475 billion through the Dodd-Frank Act. This permitted the U.S. Treasury to use the funds to stabilize the U.S. financial system, restart economic growth and prevent avoidable foreclosures.
Frank was one of the leaders of the effort, along with then-Senator Chris Dodd, D-Conn., and President George W. Bush’s secretary of the Treasury, Hank Paulson.
“They led the way in saying, look, we have to keep these large institutions on Wall Street and banks alive so they can provide credit for the economy, or the cratering economy would have completely collapsed,” Olson recalled. “And it was give-and-take there for a month or so. But they finally got it through, and then things really stabilized after that. I think that’s the most significant thing he did in his career in that area.”
Olson remembers Frank as a partisan who fought very hard, but always fairly.
“At the end of the day, at every point in the process, he was 100% a pragmatist,” Olson recalled. “He would work with Republicans and he would basically survey the landscape and say, what’s the most that we can get at this time to advance what I believe in, even though it’s a quarter of a loaf, a half a loaf, any of those, it’s much better than to keep reaching for pie in the sky and get nothing.”
In another reflection of how seriously Frank took his role, Olson recalled that even though he was not sure that there was a single manufactured home in his congressional district, Frank was a big champion of manufactured housing.
“We passed major legislation in 2008 on manufactured housing. He did that even though he had no direct benefit in his district, and certainly not in the city of Boston, because he was committed to affordable housing across the board,” Olson said. “So he would fight for rural housing. He would fight for manufactured housing. His goal was to achieve as much as he could without regard to the parochial interest.”
Frank’s death, which was confirmed to multiple news outlets by James Segal, his friend and former campaign manager, had no shortage of leaders expressing condolences.
Former President Barack Obama posted on social media: “Barney Frank was one of a kind. For more than three decades in Congress, he fought tirelessly for the people of Massachusetts, helped make housing more affordable, stood up for the rights of LGBTQ+ Americans, and helped pass one of the most sweeping financial reforms in history designed to protect consumers and prevent another financial crisis. Barney’s passion and wit were second to none, and our thoughts are with his family today.”
Sen. Elizabeth Warren, D-Mass., widely credited as the primary legislative architect of the CFPB, remembered Frank as a “gravelly-voiced, smart-as-a-whip congressman who fought hard to get the Consumer Financial Protection Bureau over the finish line.”
“Barney delivered for working people, and the world is a poorer place without him,” Warren said in statement Wednesday.
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