'I Need To Make Money' - Barney Frank Defends Signature Bank Board Role
Defending his role on the board of the failed Signature Bank, former Massachusetts Rep. Barney Frank tells Financial Times, “I need to make some money."
The man whose namesake Dodd-Frank Act piled regulations on banks in the wake of the 2008 financial crisis says he's “chagrined" over Signature's closing, "because obviously people will say, ‘Oh, hey mister, you told everybody else how to run a bank and the bank you were helping run failed’.”
Frank served on Signature's board since 2015. He told FT that, having declined a congressional pension, he needed the income:
“Having retired, not having a pension by my choice, not wanting to be a lobbyist for reasons personal, I need to make some money. I do it in part by writing. But I also do it by joining boards. Logically, I’m asked to join boards on subjects with which I was identified.”
The 82-year-old Frank made about $2.4 million on Signature's board, according to Wall Street Journal estimates. In 2012 -- near the end of his stay in Congress -- Open Secrets estimated Frank's net worth at slightly over $1 million.
Wild to see Barney Frank now doing a scummy-revolving-door-politician version of the Latrell Sprewell riff ("I have a family to feed") pic.twitter.com/IlghbK6M2P— David Sirota (@davidsirota) March 15, 2023
Frank told the New Yorker his other reason for joining Signature Bank was because it's been "the leading user of the low-income-housing tax credit in New York," which aligns with his policy interest in affordable housing.
During his time on Capitol Hill, Frank condemned staffers who left to become financial services lobbyists -- then he joined Signature's board two years after leaving Congress.
Jeff Hauser, executive director of the Revolving Door Project, rejects Frank's attempt to distinguish between being a lobbyist and a board member, telling FT:
“Ordinary people don’t disdain lobbyists because of the narrow, legal definition of the term. It’s sophistry beneath Frank’s considerable intellect” [to argue he was doing] “anything other than lobbying within the commonly understood sense of the term.”
After joining Signature's board, Frank publicly argued that Dodd-Frank's $50 billion threshold for imposing tougher regulatory measures on banks was too low. They were raised in 2018, exempting Signature and other regional banks from those extra regulations.
He told New Yorker he took that stance before joining Signature. "I decided that by 2012, and, in fact, said it publicly...In fact, I had never heard of Signature Bank at the time when I began to advocate raising the limit."
Frank says he doesn't think the threshold change made a difference in Signature's fate:
"I have read what Elizabeth [Warren], and others, said. I don’t see any argument that there was something that was going on that would’ve been stopped if they had got the same scrutiny as JPMorgan Chase...Where there was a weakening—the living will and the stress test—neither one of those goes to the actual physical condition of the bank."
Signature Bank won't be on the only dent in Frank's obituary: In 1989, he was the center of a scandal over his two-year relationship with a male hooker who ran a prostitution business out of Frank's DC apartment.