Changes could be made to Dodd-Frank, but I have concerns, Barney Frank says

Frank: The problem was unregulated derivatives

There are parts of the Dodd-Frank financial regulations that could be amended to help smaller banks, one of the bill's co-sponsors, Barney Frank, told CNBC on Wednesday. But the Trump administration should tread carefully, he warned.

"What I worry about is the biggest banks … will use the problems of the small banks as kind of a battering ram to get rid of other parts of the bill," the Democratic former Massachusetts congressman said in an interview with "Power Lunch."

President-elect Donald Trump's team is already looking at making changes to the massive reforms that came about after the 2008 financial crisis. Frank co-authored the bill along Democratic former Sen. Chris Dodd.

Earlier Wednesday, Trump's pick for Treasury secretary, Steve Mnuchin, told CNBC that he wants to "strip back parts of Dodd-Frank that prevent banks from lending."

"Tell me what specific things in that law now inhibit lending other than saying you can't lend money to people who can't pay their mortgages," Frank responded.

Back when he drafted the bill, Frank said he thought there was universal agreement that standards for mortgages had deteriorated too much and people were given loans they were unable to pay back.

"Is that one of the things he wants to change? I don't know," Frank said.

However, if someone can point out other specific areas that restrict lending, he said he'd be glad to say maybe it should be changed.

One thing Frank would be in favor of is raising the threshold — $50 billion in assets — for banks to face increased regulatory burdens.

He also thinks banks that have under $10 billion in assets are spending too much money to comply with the Volker rule, which is meant to rein in risky trading by banks. Frank said he'd exempt them altogether.

— CNBC's Elizabeth Gurdus contributed to this report.