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CNBC TRANSCRIPT: CNBC'S MARIA BARTIROMO SPEAKS WITH REP. BARNEY FRANK, HOUSE FINANCIAL SERVICES COMMITTEE CHAIRMAN, TODAY ON CNBC'S "CLOSING BELL WITH MARIA BARTIROMO"

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Barney Frank

WHEN: Today, Friday, March 5th

WHERE: CNBC's "Closing Bell with Maria Bartiromo"

Following is the unofficial transcript of a CNBC interview with Congressman Barney Frank today on CNBC's "Closing Bell with Maria Bartiromo."

All references must be sourced to CNBC.

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MARIA BARTIROMO: WELCOME BACK. A DEBATE OVER WHETHER THE U.S. GOVERNMENT SHOULD BE LEGALLY OBLIGATED TO GUARANTEE DEBT ISSUED BY FANNIE MAE AND FREDDIE MAC IS RAISING QUESTIONS ABOUT THE SAFETY OF INVESTING IN THE MORTGAGE FINANCE GIANTS. THE TREASURY DEPARTMENT TELLS INVESTORS THERE SHOULD "BE NO UNCERTAINTY ABOUT ITS COMMITMENT TO SUPPORT FANNIE AND FREDDIE." BUT HOUSE FINANCIAL SERVICES COMMITTEE CHAIRMAN BARNEY FRANK DOESN'T WANT THAT SUPPORT TO BE MANDATED BY LAW. AS SOME ON CAPITOL HILL ARE PROPOSING. THIS QUOTE IN "THE WALL STREET JOURNAL" CAUGHT THE MARKET'S ATTENTION TODAY. "PEOPLE WHO OWN FANNIE AND FREDDIE DEBT ARE NOT IN THE SAME LEGAL POSITION AS THOSE WHO OWN TREASURY BONDS, AND I DON'T WANT THEM TO BE. "IN A FOLLOW-UP STATEMENT MR. FRANK SAYS "I CONTINUE TO THINK THAT IT WOULD BE A MISTAKE FOR CONGRESS TO TAKE ACTION THAT FORMALLY CONFERRED ON FANNIE AND FREDDIE DEBT THE LEGAL STATUS OF DEBT ISSUED BY THE TREASURY." "BUT NOTHING IN THAT POSITION PREVENTS TREASURE FROM ACTING AS IT THINKS BEST -- TO PROVIDE STABILITY, TO THE HOUSING MARKET AND THE FINANCIAL SYSTEM." CONGRESSMAN FRANK JOINS ME NOW TO EXPLAIN THE COMMENTS. CONGRESSMAN, GOOD TO HAVE YOU ON THE PROGRAM. WELCOME BACK TO THE "CLOSING BELL."

FRANK: THANK YOU, MARIA.GOOD TO TALK TO YOU AGAIN.

BARTIROMO: SO LET ME JUST ASK YOU ABOUT THOSE COMMENTS. YOU'RE BASICALLY SAYING, LOOK, DEBT HOLDERS SHOULDN'T ASSUME GUARANTY.

FRANK: WELL, I'M TAKING A POSITION -- I'M RESTATING A POSITION THAT I'VE STATED FOR A LONG TIME. I THINK THAT PEOPLE KEPT TALKING ABOUT AN IMPLICIT GUARANTEE FOR FANNIE MAE AND FREDDIE MAC AND I THINK IT WAS A SELF-FULFILLING PROPHECY. I KEPT SAYING IT WASN'T. A LOT OF SHAREHOLDERS OF FANNIE MAE AND FREDDIE MAC WERE WIPED OUT OR SUBSTANTIALLY DIMINISHED. NOW TREASURY DID AND POINTED OUT TO ME ON DECEMBER 24th THEY ISSUED A STATEMENT ABOUT WHAT THEY WERE GOING TO DO. I CERTAINLY SUPPORT TREASURY STANDING BY WHAT IT SAID SO AS OF THE DECEMBER 24th STATEMENT, YES, TREASURY SAID THAT THEY PLAN TO DO THIS AND WE DON'T WANT ANYONE TO DOUBT THEIR WORD. BUT IT'S STILL NOT THE SAME AS A BINDING LEGAL OBJECTION OF THE FEDERAL GOVERNMENT AND DON'T THINK THAT WE SHOULD CONFUSE THAT.

BARTIROMO: THAT'S RIGHT IT'S NOT BINDING. BUT DO YOU REALLY THINK THAT THERE'S THE SLIGHTEST POSSIBILITY THAT THE U.S. GOVERNMENT DOES NOT STAND BEHIND FANNIE AND FREDDIE, AND THEY ARE ACTUALLY IN CONSERVATORSHIP.

FRANK: OH, I SAY THIS, PARTICULARLY WITH THE STATEMENT OF DECEMBER 24th, PEOPLE WHO ARE PUTTING MONEY IN NOW, YES, THAT SHOULD BE PROTECTED. BUT PEOPLE WHO, FOR INSTANCE, MAY HAVE INVESTED BEFORE THE CONSERVATORSHIP, LIKE THE SHAREHOLDERS, AND AGAIN, THERE ARE PEOPLE OUT THERE WHO ARE SHAREHOLDERS. WELL, THEY MAY BE WONDERING WHY THEY GOT WIPED OUT AS THEY DID. THERE WAS A DIMINUTION OF WHAT THEY HAD. I BELIEVE TREASURIES SHOULD HAVE THE ABILITY TO DO WHAT IT THINKS BEST, BUT IT'S BECAUSE WE WANT TO PROTECT THE STABILITY OF THE HOUSING MARKET. AND I THINK THAT WE OUGHT TO HAVE A VERY SHARP LINE, A LEGAL OBLIGATION, THE U.S. GOVERNMENT IS HERE. AND OTHER THINGS, THEY MAY BE VERY SECURE, YOU MAY FEEL VERY GOOD ABOUT THEM BUT THEY'RE NOT THE SAME OF THE LEGAL OBLIGATION OF THE U.S. GOVERNMENT. I DO THINK THAT -- BY THE WAY, WHAT I BELIEVE WE'RE GOING TO DO GOING FORWARD IS TO GET A WHOLE NEW SYSTEM OF HOUSING FINANCE. WE HAVE A TANGLE THAT'S BEEN AROUND FOR A LONG TIME. FANNIE MAE, FREDDIE MAC, GINNIE MAE, THE FEDERAL HOUSING ADMINISTRATION, THE FEDERAL HOME BANKS, A MIX OF PRIVATE AND PUBLIC. THAT WORKED FOR A WHILE WHEN HOUSING PRICES WERE GOING UP AND UP. WHEN HOUSING PRICES COLLAPSED IT BECAME CLEAR. WARREN BUFFETT SAID WHEN THE TIDE GOES OUT YOU SEE WHO IS SWIMMING NAKED. WELL A LOT OF NUDITY GOING AROUND IN OUR FINANCIAL HOUSING FINANCE. AND WE DO PLAN -- I PLAN TO HAVE HEARINGS, I HAD TO POSTPONE THEM, TO SORT ALL OF THIS OUT. AND GOING FORWARD I DON'T WANT ANYONE TO ASSUME THAT THIS IS GOING TO BE DEBT OF A CERTAIN LEVEL OR NOT. I THINK THAT WE HAVE TO START FROM A FRESH PERSPECTIVE.

BARTIROMO: RIGHT, BUT DOESN'T THIS MAKE A MUCH RISKIER SITUATION RIGHT NOW? I MEAN, EVEN -- THE FED'S BALANCE SHEET, FOR EXAMPLE, IS LOADED WITH THIS STUFF.

FRANK: WELL, THE FED'S BALANCE SHEET, YEAH. THAT'S TRUE. AND I BELIEVE THAT TREASURY MADE IT VERY CLEAR THAT, PARTICULARLY WITH THE STUFF THAT THEY -- AND I GUESS YOU WOULD HAVE TO DISTINGUISH BETWEEN THE PERIOD AND THE CONSERVATORSHIP FORWARD. ONCE THE GOVERNMENT STEPPED IN WITH THE CONSERVATORSHIP THAT WAS A HEAVY PROMISE BY THE GOVERNMENT WHICH GOES BACK TWO ADMINISTRATIONS. REMEMBER IT WAS SECRETARY PAULSON WHO PROMOTED THAT CONSERVATORSHIP AFTER WE -- IT WAS A BIPARTISAN THING. DEMOCRATS TOOK OVER IN 2007 NO LEGISLATION HAD BEEN PASSED. WE RESPONDED TO SECRETARY PAULSON AND GAVE HIM VARIOUS REGULATORY POWERS AND ACCORDING TO CONSERVATORSHIP BUT THERE MAY BE PAPER FROM WAY BACK, YOU KNOW YEARS FROM BEFORE THAT. I DON'T WANT ANYONE TO THINK THAT'S 100% OF THE FEDERAL GOVERNMENT. WHAT HAPPENED SINCE CONSERVATORSHIP, YES, THAT'S IN A DIFFERENT CATEGORY BECAUSE THERE IS EXPLICIT PLEDGES MADE BY THE FEDERAL GOVERNMENT.

BARTIROMO: SO YOU SAID THAT THERE ARE OPTIONS AVAILABLE FOR THEM? A WHOLE RANGE OF OPTIONS AND INVESTORS SHOULD NOT BE SURPRISED IF THEY TAKE A HAIRCUT. WHAT ARE THE OPTIONS, SIR?

FRANK: WELL ANOTHER, NOT USEFUL TO SPECULATE IN GENERAL ABOUT THOSE BECAUSE, AS I SAID, PEOPLE WHO BOUGHT FROM THE CONSERVATORSHIP ON ARE IN A DIFFERENT CATEGORY THAN PEOPLE WHO HAD HELD PAPER BEFORE THE CONSERVATORSHIP. AND LOOK, NO ONE WANTS TO REDUCE WHAT PEOPLE GET. WE WANT TO BE ABLE TO PAY OFF PEOPLE. BUT I DO JUST WANT TO STATE WHAT I THOUGHT WAS FOR THE OBVIOUS. THAT IF YOU BOUGHT FROM FANNIE MAE AND FREDDIE MAC, PARTICULARLY BEFORE 2008 IN THE CONSERVATORSHIP, AS I WAS SAYING CONSISTENTLY AT THAT TIME, YOU WERE NOT BUYING TREASURIES.YOU WERE NOT BUYING 100% OBLIGATION. NOW FROM THE CONSERVATORSHIP ON, THAT WAS A DIFFERENT STORY. AS OF DECEMBER 24th, WHEN THE FEDERAL TREASURY MADE SOME VERY EXPLICIT STATEMENTS --

BARTIROMO: RIGHT.

FRANK: -- THAT'S A DIFFERENT STORY. BEYOND THAT I DON'T THINK IT'S USEFUL TO SPECULATE.

BARTIROMO: DO YOU THINK THAT THE FOREIGN CENTRAL BANKS ARE GOING TO FEEL DIFFERENTLY ABOUT HOLDING THIS PAPER, AFTER TODAY?

FRANK: IT DEPENDS ON WHEN THEY BOUGHT THAT PAPER. AND BY THE WAY, YOU SAY, HOLDING IT, WHO ARE THEY GOING TO SELL IT TO? EACH OTHER?

BARTIROMO: WELL, I MEAN, JUST -- YEAH, I MEAN, JUST GETTING RID OF IT, GETTING RID OF IT IN IN THE MARKET.

FRANK: WELL THAT DOESN'T -- I'M NOT AFRAID THAT -- IT CAN'T BE THAT THE PAPER'S GOING TO BE DEVALUED. IN ORDER TO GET RID OF IT. I THINK THAT WOULD MAKE IT A LESS LIKELY. AND NOBODY'S SUGGESTING THAT IT IS DEVALUED NOW. BUT I DO THINK IT'S IMPORTANT TO KNOW WHAT THE LEGAL DIFFERENCES ARE BETWEEN U.S. TREASURIES AND, AGAIN AS I SAID, PEOPLE WHO BOUGHT FROM THE CONSERVATORSHIP ON, THAT'S A DIFFERENT STORY. NOW I DO KNOW IT'S BEEN THE VIEW OF THE BUSH TREASURY AND OF THE OBAMA TREASURY, AND YOU GO BACK TO THE CLINTON AND PREVIOUS, BUSH AND REAGAN TREASURIES, THEY BELIEVED IT WAS IMPORTANT TO HONOR THOSE COMMITMENTS. THAT'S A CHOICE THEY ARE ENTITLED TO MAKE. BUT WE OUGHT TO BE CLEAR THAT THAT'S NOT THE SAME AS A LEGAL-BINDING OBLIGATION OF THE FEDERAL GOVERNMENT.

BARTIROMO: HOW MUCH LONGER, CONGRESSMAN, WOULD YOU FEEL COMFORTABLE WITH THE TREASURY BACKING THE DEBT HELD BY FANNIE AND FREDDIE?

FRANK: OH, THAT'S A PRUDENTIAL JUDGMENT THAT THERE IS NO POINT IN TRYING TO MAKE NOW. LOOK I BELIEVE THAT WE OUGHT TO REORGANIZE THE WHOLE HOUSING FINANCE SYSTEM. BUT ROLE OF THESE ENTITIES -- FANNIE MAE AND FREDDIE MAC -- IS VERY IMPORTANT IN THE HOUSING FINANCIAL SYSTEM. THEY'RE NOT OPERATING THE WAY THEY USED TO. NOT THESE PRIVATE SHAREHOLDER CORPORATIONS.THEY'RE OPERATING UNDER THE FEDERAL GOVERNMENT SUPERVISION BUT THOSE ARE QUESTIONS THAT DEPEND ON WHERE WE ARE. I WOULD HOPE THAT FAIRLY PROMPTLY --

BARTIROMO: RIGHT.

FRANK: -- WE COULD COME UP WITH A NEW SET OF RULES AND WHAT WE HAVE TO DO IS AVOID THE HYBRID. WE HAD THIS MISTAKE THAT WAS THERE LONG BEFORE I GOT TO CONGRESS OF A PUBLIC COMPANY OWNED BY SHAREHOLDERS WHICH ALSO HAD A PUBLIC POLICY MISSION. I DON'T THINK WE SHOULD REPLICATE THAT. HONESTLY. AND IF WE DO WE HAVE TO BE VERY EXPLICIT ABOUT WHO IS PUTTING THE MONEY WHERE.

BARTIROMO: YEAH, I WANT TO GET TO -- I WANT TO GET TO FINANCIAL REFORM AND A COUPLE OF OTHER THINGS, CONGRESSMAN. BUT LET ME ASK YOU ONE LAST QUESTION THIS SUBJECT. IF WE CAN TAKE A POSSIBLE FUTURE SCENARIO, IF THE GOVERNMENT DECIDES NOT BACK FANNIE AND FREDDIE DEBT WITH THE MARKET HANDLE IT IF THE BONDHOLDERS DEMAND HIGHER RATES FOR THEIR MONEY?

FRANK: OH -- YOU MEAN GOING FORWARD?

BARTIROMO: YEAH.

FRANK: I WOULD SAY THAT YOU'RE UNLIKELY TO HAVE ALL OF IT DONE -- BY THE WAY, SOME OF IT IS PRIVATE. I THINK THAT YOU HAVE TO SORT THIS OUT. THERE WILL BE A FUNCTION OF PROVIDING LIQUIDITY FOR THE SECONDARY MORTGAGE MARKET. I WOULD BELIEVE BY PRIVATE CORPORATIONS. SO, I HAVE TO LEAVE THAT OPEN. I THINK THE NOTION THAT THE FEDERAL GOVERNMENT WILL FOREVER STAND BEHIND NEWLY ISSUED -- WE'RE NOT TALKING ABOUT OLD OBLIGATION IT'S NEWLY ISSUED MORTGAGE DEBT, THE ANSWER IS, THAT'S ONE OF THE QUESTIONS WE HAVE TO DECIDE. AND I THINK WE HAVE TO BE PRUDENT IN THE FUTURE ABOUT WHAT WE ARE AND ARE NOT OBLIGATED TO. SAY THIS, PART OF IT WAS CONFUSION. IMPLICIT GUARANTEES, ETC. THERE WILL BE NOTHING IMPLICIT, I HOPING GOING FORWARD. IT WILL BE VERY CLEAR WHAT IS AN OBLIGATION AND WHAT ISN'T.

BARTIROMO: BUT I MEAN, HOW CAN TWO INVESTORS IN THE SAME PIECE OF PAPER BE TREATED DIFFERENTLY? I MEAN, YOU'RE MAKING A DISTINCTION. THOSE PEOPLE -- NO I'M NOT.

BARTIROMO: YEAH. YOU SAID PEOPLE BEFORE CONSERVATORSHIP AND AFTER CONSERVATORSHIP.

FRANK: YEAH, I'M TALKING ABOUT IF THE PAPER WAS ISSUED BEFORE OR AFTER.

BARTIROMO: RIGHT.

FRANK: I AM SORRY YOU MAY HAVE MISUNDERSTOOD ME. I WASN'T SAYING IT DEPENDS ON WHEN YOU BOUGHT IT, IT DEPENDS ON WHEN IT WAS ISSUED. PAPER ISSUED BEFORE THE CONSERVATORSHIP AND PAPER ISSUED AFTERWARDS. I'M NOT TALKING ABOUT DIFFERENTIATING -- NO, THAT'S NOT WHAT I MEANT AT ALL. THERE ARE PEOPLE WHO BOUGHT THIS DEBT MANY YEARS AGO. AND THEN THERE ARE PEOPLE WHO BOUGHT SUBSEQUENT FROM THE FEDERAL GOVERNMENT, FROM THE -- WHEN IT WAS ISSUED. I'M NOT TALKING ABOUT -- IF THE DEBT WAS TRADED BACK AND FORTH -- WHAT'S DETERMINATE TO ME IS WHEN IT WAS ISSUED.

BARTIROMO: OKAY. LET ME MOVE ON FOR A SECOND, MOMENT HERE, CONGRESSMAN. THE THE HOUSE HAS PASSED THIS FINANCIAL REGULATION REFORM.THE SENATE'S STILL WORKING ON THEIRS. WHAT ARE WE STUCK ON? IS IT STUCK ON WHETHER A STANDALONE CONSUMER PROTECTION AGENCY OR PLACED WITH ANOTHER AGENCY? GIVE ME A BLUEPRINT OF WHAT FINANCIAL REG REFORM WILL LOOK LIKE.

FRANK: ON CONSUMER FINANCIAL PROTECTION IT'S NOT SIMPLY WHERE IT IS HOUSED BUT WHAT ITS POWERS ARE. CAN IT BE OVERRIDDEN BY A BANK REGULATOR? I THINK THAT WOULD BE A TERRIBLE MISTAKE BECAUSE THE BANK REGULATORS HAVE A DIFFERENT SET OF PRIORITIES. DOES IT HAVE THE FULL SCOPE, OVER NOT JUST BANKS, BUT FRANKLY, EVEN MORE THAN NONBANKS WHICH MORE THAN THE BANKS HAVE BEEN WHERE WE HAVE HAD A NUMBER THE PROBLEMS THAT HAVE LED TO SYSTEMIC ISSUES BUT OTHER ISSUE, WE IN THE HOUSE IMPOSED A FIDUCIARY RESPONSIBILITY. THE SENATE, WE'RE TOLD, IS THINKING ABOUT TAKING THAT AWAY. THAT WOULD BE A VERY SERIOUS PROBLEM. IN OTHER AREAS, I DON'T QUITE KNOW WHAT THE SENATE IS PLANNING. IN MANY AREAS IS THE SAME, AND AS I HAVE LOOKED AT SENATOR DODD'S ORIGINAL DRAFT WE'RE VERY CLOSE IN A LOT OF WAYS. I THINK THAT HE'S DONE A VERY GOOD JOB BUT I DON'T KNOW WHAT KIND OF COMPROMISES HE'S GOING TO MAKE. I WOULD SUGGEST SOMETHING VERY RADICAL ONCE THE SENATE HAS PASSED ITS BILL WE HAVE A HOUSE SENATE CONFERENCE. WE USED TO HAVE ALL OF THE TIME. I WOULD LOOK FORWARD TAKING THE HOUSE BILL WITH OTHER MEMBERS OF THE HOUSE -- DEMOCRATIC AND REPUBLICAN -- AND SENATORS -- DEMOCRAT AND REPUBLICAN -- AND SITTING IN A PUBLIC FORUM THE WAY WE USED TO DO IT AND GO ISSUE BY ISSUE THAT IS DIFFERENT BETWEEN US AND HAVE A BIG PUBLIC DEBATE. MY OWN VIEW IS THAT THE NUMBER OF SENATORS, REPUBLICANS OR DEMOCRATS, WHO ARE READY TO SIDE WITH THE BANKS OR INDEPENDENT CONSUMER AGENCY ISN'T AS GREAT AS SOME MAY THINK. I THINK WE WOULD HAVE THE VOTES TO IMPOSE A FIDUCIARY RESPONSIBILITY. I DON'T KNOW WHERE WE'LL BE ON DERIVATIVES. ON SOME OF ISSUES WE'RE CLOSE IN CONCEPT. THERE ARE SOME DIFFERENCES IN HOW YOU STRUCTURE IT. NOT DIFFERENCES IN PRINCIPLE, ON PUTTING LIMITS ON WHAT THE LEVERAGE GOES FORWARD ON REGULATING DERIVATIVES MUCH MORE CAREFULLY THAN THEY'VE BEEN. ON HOW YOU PUT ONE OF THESE INSTITUTION TO DEATH. AND REMOVE ANY INCENTIVE TO INVEST IN THEM AND THE NOTION THAT THEY'RE TOO BIG TO FAIL. I THINK THAT WE'RE CLOSE ON A LOT OF THOSE. BUT THE MAIN THING WE NEED DO IS FOR THE SENATE TO PASS ITS BILL AND SENATOR DODD'S WORKING VERY HARD ON THAT IN A DIFFERENT BILL -- AN INSTITUTIONAL ATMOSPHERE AND THEN GO TO A CONFERENCE. SO I'M THE -- YOU KNOW MY RADICAL POSITION NOW IS LET'S HAVE A HOUSE/SENATE CONFERENCE. LET'S SIT DOWN IN PUBLIC THE WAY THAT I THINK THAT WE SHOULD AND GO ISSUE BY ISSUE. AND THE HOUSE AND THE SENATE WILL VOTE AND WE'LL SEE WHAT WE COME UP WITH.

BARTIROMO: IS IT FAIR TO SAY THIS IS GOING TO BE THE ONLY LEGISLATION THAT YOU'RE GOING TO BE ABLE TO PASS THIS YEAR.

FRANK: OH, NO, NO. THE COMMITTEE THAT I CHAIR HAS ALREADY WORKED ON OTHER STUFF. WE'VE GOT SOME IMPORTANT LEGISLATION IN THE HOUSING AREA THAT I BELIEVE WE WILL BE GOING FORWARD WITH. WE HAVE A LOT OF AFFORDABLE HOUSING THAT WAS BUILT THAT HAD 20 AND 40-YEAR EXPIRATION DATES. WE WANT TO PRESERVE THAT. WE HAVE A BILL THAT REFORMS IT WAS A BUSH AND OBAMA INITIATIVE TO REFORM THE SECTION 8 VOUCHER PROGRAM. WE'RE VERY CLOSE TO GETTING THAT BILL THROUGH THE HOUSE AND I THINK THAT THE SENATE WILL ADOPT IT. THERE WILL BE SOME OTHER ISSUES THAT WE'LL BE ABLE TO ACT ON AS WELL.

BARTIROMO: FINAL QUESTION HERE, I COULD TALK TO YOU ALL DAY, CONGRESSMAN. BUT IS THE VOLCKER RULE, BASICALLY, DEAD IN THE WATER?BECAUSE YOU CAN'T REALLY DEFINE WHAT PROPRIETARY TRADING IS.

FRANK: NO BECAUSE I THINK THAT YOU CAN DEFINE IT, IN PART, BY THE VOLUME OF TRADING. AND IN THE BILL THAT WE PASSED IN THE HOUSE, WE ANTICIPATED THAT. WE'VE BEEN TALKING TO MR. VOLCKER ALL DURING THE PAST YEAR WHEN WE DEBATED THIS. THE HOUSE GIVES IT'S HOUSE BILL GIVES THE OBAMA ADMINISTRATION, REGULATORS, THE ABILITY TO DO EVERYTHING THAT THEY'VE ASKED FOR IN THE VOLCKER RULE. NOW THE VOLCKER RULE, AS THEY PROPOSE IT, WOULD MANDATE IT. THEY HAVEN'T ASKED US TO DO THAT. BUT WE, BEFORE THEY EVEN ASKED FOR IT THROUGH AMENDMENT SPONSORED BY MY COLLEAGUES, HAVE GIVEN THE ABILITY TO RESTRICT PROPRIETARY TRADING AND WITH PROPRIETARY TRADING IT'S NOT NECESSARILY EITHER/OR IT'S MORE OR LESS. AS YOU GET MORE AND MORE TRADING, MORE AND MORE VOLATILITY, THEN YOU CAN PROBABLY FIGURE THAT THERE'S AN ELEMENT OF SPECULATIVE TRADING OTHER THAN WHAT YOU NEED FOR THE CUSTOMERS. AND SIMILARLY, WE'VE GIVEN THEM THE POWER TO FORCE DIVESTITURE OF HEDGE AND OTHER ENTITIES AND TO REDUCE THEM. WE WOULD BE RELUCTANT TO CUT THIS BACK. THE ADMINISTRATION WILL HAVE THE POWER TO DO EVERYTHING THAT THEY'VE ASKED FOR. IT WON'T BE MANDATED FOR FUTURE AND THAT'S ON THE TABLE. BUT MY OWN VIEW IS THIS, IF THE OBAMA ADMINISTRATION GETS THE POWER THAT OUR BILL GIVES THEM AND CARRIES OUT THESE RULES I THINK IT WILL BE A LONG TIME BEFORE ANY PRESIDENT WILL RUN ON THE PLATFORM OF DEREGULATING AGAIN.

BARTIROMO: HOW COME THERE IS SO MUCH FIGHTING IN WASHINGTON? HOW COME YOU GUYS CAN'T GET ANYTHING DONE?

FRANK: WELL, WE ARE GETTING THINGS DONE IN THE HOUSE. THE MAIN REASON IS THAT THERE'S BEEN A DE FACTO AMENDMENT TO THE US CONSTITUTION THAT SAYS YOU NEED TO GET 60 VOTES IN THE SENATE. THAT DIDN'T USED TO BE THE CASE FOR MOST OF AMERICAN HISTORY. FILIBUSTERS WERE RARE. THIS NOTION THAT EVERYTHING REQUIRES 60 VOTES IS A REASON. THE HOUSE HAS PASSED A NUMBER OF PIECES OF LEGISLATION WITH A 60-VOTE REQUIREMENT, AS I SAID, THAT'S NOT BEEN THE RULE IN AMERICA. AND THEN, OUT ON THE 60-VOTE REQUIREMENT, BY THE WAY, SINCE YOU NEED TO GET 60 VOTES YOU HAVE TO HAVE THEIR VOTE YOU THEN GET A SITUATION WHERE PEOPLE LIKE SENATOR SHELBY OF ALABAMA, SENATOR BUNNING OF KENTUCKY CAN DECIDED TO HOLD UP EVERYTHING BY REFUSING TO ALLOW IT TO GO TO A VOTE. SENATOR SHELBY DID THAT BECAUSE HE WANTED TO GET SOME MONEY SPENT IN HIS DISTRICT. SENATOR BUNNING DID IT OVER UNEMPLOYMENT SO ESSENTIALLY THAT RULE THAT SAYS YOU NEED 60 VOTES BEFORE YOU CAN GET TO A VOTE THAT'S BEEN THE CAUSE OF THE DYSFUNCTION.

BARTIROMO: CONGRESSMAN IT IS GREAT TO HAVE YOU ON THE PROGRAM, WE APPRECIATE YOUR TIME AS ALWAYS.

FRANK: THANK YOU

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