Award For Hypocrite Of The Decade Goes To... Barney Frank
Award For Hypocrite Of The Decade Goes To... Barney Frank
The former Mass. legislator cashed in on the board of Signature Bank, which was taken over by regulators Sunday after Frank weakened his signature 2008 bill to prevent such bank failures.
Barney Frank, a former Democratic legislator from Massachusetts who retired in 2013, has been on the Board of Directors of the Signature Bank since 2015.
What a fabulous gig!
Frank reportedly has earned more than $2.4 billion in compensation from Signature Bank for his work on the board.
The bank said Frank was chosen because of his role in the U.S. Congress in the aftermath of the 2008 financial crisis, which was the worst in 100 years.
Frank, then chair of the House Financial Services Committee, was instrumental in creating a $550 billion taxpayer bailout for banks that were deemed too big to fail. He then co-authored the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which was supposed to make the U.S. financial system safer in the future.
But three years after he joined Signature Bank’s board, Frank had second thoughts about Dodd-Frank.
Second Thoughts
Frank, a Democrat, encouraged former GOP Pres. Donald Trump’s successful push in 2018 to roll back Dodd-Frank’s regulations for small and regional banks like New York-based Signature Bank. Frank argued Dodd-Frank could harm the competitiveness of smaller banks that played no role in the financial crisis.
According to Frank, the roll-back on Dodd-Frank played no role in Signature’s failure but… this seems fanciful.
Instead of applying to banks with $50 billion in assets, Congress raised the asset threshold of Dodd Frank to banks with $250 billion in assets. Signature was under Dodd-Frank’s radar even after it doubled in size to $110 billion in assets and $88.6 billion in deposits.
Junk
Moody’s on Monday downgraded the debt rating of Signature Bank to junk.
Most of Signature’s depositors exceed the $250,000 limit for standard insurance from the Federal Deposit Insurance Corp. but the Biden administrations has announced their losses will be covered. This is deja vue for those of us who remember 2008, when taxpayers were forced to foot the bill for Wells Fargo & Co., Bank Corp. of America Corp., State Street Corp., etc.
There is on-going debate about whether the “bail out” of Signature is technically a taxpayer bail out. To we non-depositors, it certainly feels that way.
The collapse of Signature Bank was the third largest failure in U.S. banking history.
Frank used his opportunity to serve the public to bestow credibility on Signature Bank, which promoted Frank on its web site as having “extensive experience as a Congressman, and particularly as Chair of the House Financial Services Committee… [this] led the Board to conclude that he should be a member of the Board.”
Federal filings show Frank was on the Environmental and Social Impact Committee of Signature Bank, where he was charged with “putting people first.”
No Wall Street CEO went to jail after the 2008 financial crisis, though millions of Americans lost their homes, jobs and savings. The crisis set off a recession that is reputed to have destroyed over $30 trillion of the world’s wealth. Many older people are retiring today without sufficient funds to support themselves in the years ahead because of the 2008 financial crisis.
Thankfully, Barney Frank is in good financial shape!
Frank in 2022 collected $121,750 in cash compensation for his work on Signature’s board and $180,182 in stock awards, $1,335 in other compensation, for a total of $303,267.