INTERVIEW TRANSCRIPT

C-SPAN’S “NEWSMAKERS”

Guest: Congressman Barney Frank (D-MA)

Reporters: Julie Hirschfeld Davis, Associated Press &

Patrick Rucker, Reuters

Moderator: C-SPAN

TAPE DATE: Friday, May 2, 2008

AIR DATE/TIME: SUNDAY, May 4, 2008 at 10 a.m. and 6 p.m. ET

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PETER SLEN, HOST, C-SPAN’S “NEWSMAKERS”: Well, the House Financial Services Committee this past week passed a bill aimed at helping homeowners with mortgage difficulties. The chairman of that committee, Representative Barney Frank, who crafted the legislation, is our guest this week on “Newsmakers.”

Here to question him, Julie Hirschfeld Davis of the Associated Press, and Patrick Rucker of Reuters, a finance reporter there.

Congressman Frank, if I could start with the first question.

Representative John Boehner’s office was quoted as saying that the bill that the Financial Services Committee passed helped house flippers and speculators, rather than homeowners with real mortgage problems.

What is your reaction to that?

REP. BARNEY FRANK, D-MASSACHUSETTS, CHAIRMAN, HOUSE FINANCIAL SERVICES COMMITTEE: That I hope he’ll send me the bill he’s discussing, because it does not resemble what I’m talking about.

First of all, as to speculators and house flippers, no, the bill we passed in committee – with, by the way, 10 Republican votes, so one-third of the Republicans on that committee voted with us, and they joined me in disagreeing with Mr. Boehner.

Help under this bill – and it’s not taxpayer help directly, it’s help that would come from the private holders of mortgages – is limited to people who are living in their primary residence. Investors, speculators, second homes are not covered.

So, I don’t understand why he thinks this is something for speculators. We specifically in this bill cover only people who are living in their own primary residence.

JULIE HIRSCHFELD DAVIS, ASSOCIATED PRESS WRITER: You mentioned you had 10 Republican supporters on your committee. What do you expect to see happen next week when this goes to the floor? Do you expect broad Republican support? And if so, how broad? And what are you doing to try to make sure that you have as big a bipartisan vote as possible?

FRANK: As I anticipate it, this will probably not go to the floor as a standalone bill.

You know, the president in his press conference earlier, I think, last week, said he wanted Congress to pass the FHA modernization bill, which would allow people to use the FHA going forward as an alternative to subprime loans. He wanted us to pass a bill that improved the regulation for Fannie Mae and Freddie Mac and the Federal Home Loan Banks, because he’s had to acknowledge now that they’re a very important part of trying to get more money into the system. They were originally skeptical of that at the White House, and they’ve turned it around. And he wants the Ways and Means Committee bill to put more mortgage revenue bonds, so we can build more housing.

I believe that what’s going to happen is that, when we go to the floor this coming week, all of the bills I just mentioned – plus the one we’ve now been talking about – will be put in one package, along with some other useful things.

Charlie Rangel and I – the chairman of Ways and Means, under his leadership – have put together a bill that will make the low-income housing tax credit much more user-friendly by making it much less bureaucratic.

So, what we’re going to be talking about is a package that includes a number of things.

Three of the bills – again, I want to be clear that the president specifically called on Congress to act – will be there. That’s pretty good. That’s less than two weeks after he said that.

I also noted in the “Washington Post” on Friday morning, Mr. Fratto, the White House press secretary, said, well, there were some things we don’t like. But he noted that we had taken out some things they didn’t like.

I think things are moving towards a situation where we may be able to adopt a large package in the House and send it to the Senate, that’s going to get done.

There’s a great need to do this. And we’ve worked with Mr. Bernanke, and we’ve been talking to Mr. Paulson, the leading economic officials in the administration. We’ve also been in touch with Senator Dodd.

And I think you’re not going to see just this bill alone. I believe you’re going to see a package that’s going to include a lot of things the president very much wants, maybe a couple of things that don’t make him wildly happy. But legislating is compromise.

DAVIS: How big do you think this is going to get before it comes out of Congress and goes to the president, both scope-wise and in terms of cost?

FRANK: The major elements of this package – there’ll be a couple of packages – I hope there’ll be a second stimulus. The bill that my colleague, Maxine Waters, has worked so hard on is also a very important bill. That’s the one where we buy up property that’s already been foreclosed, which is sitting in cities and causing problems. We give money to cities to do this.

I just got letters from a couple of police chiefs in Minnesota saying, please, these foreclosed buildings are a terrible crime problem.

That one will, according to the Congressional Budget Office, cost $7, $8 billion over five years. You know, $1.6 billion a year is a reasonable cost, we think, if it helps avert a lot of these problems in the cities.

The package I’m talking about, the larger package with the Fannie-Freddie reform, that doesn’t cost anything. The FHA modernization makes a little bit of money, this one. I’d say you’d be talking about a cost of some, perhaps $4 billion, again over a five-year period.

Speaker Pelosi has been very insistent that we pay for these things. But many of these things have a countercyclical effect. We’re trying to deal with a recession.

Under the PAYGO, as we call it, principle, you have five years to pay it off. It wouldn’t make sense, if you’re trying to spend to stave off a recession, to spend and offset it in the same year. But I think these are manageable sums over a period of five years.

PETER RUCKER, FINANCE REPORTER, REUTERS: Are you concerned at all that the administration, though, could try to outflank you in these next few months?

We’ve got – the Treasury Department has already had some of their initiatives that are going on. There’s HOPE NOW, which reaches out to homeowners and tries to get the industry to come along.

The Department of Housing and Urban Development, which oversees FHA – which is the agency you’re trying to retool – the administration said, well, we can do a lot of what Barney Frank wants to do administratively. We don’t need a big new initiative.

FRANK: First of all, “outflank” is the wrong metaphor. We’re not at war. We’re on the same side.

To the extent that the administration takes actions that anticipate what’s in our bill, I’m happy. It’s not a credit-claiming contest.

And I am pleased that they’ve moved. They started out with something called HOPE NOW, and they’ve moved in the direction. The differences between us are smaller.

I also believe, though, that there were some things that we do in the bill that they can’t do administratively. But certainly, look, to the extent that they move in our direction, I don’t consider that being outflanked. I consider that an example of cooperation.

The goal here is to try to diminish foreclosures and try and shorten the recession. So, I’m happy if they can take actions that move in that direction, and (ph) everything (ph) goes forward, as we all should go, if we do it legislatively.

And again, I would stress, 10 Republicans voted with us in the bill on Thursday, last Thursday. And they were, on the whole, Republicans from the states that have been hurt the worst – people from Florida, people from Ohio.

I think the president can pay attention when the people from his own party say to him, “You know, in my state where this is a serious problem, we need some help.”

DAVIS: The Senate is also looking at a similar plan. You mentioned Chairman Dodd has proposed something similar to what you have. But they’re not as far along in the process in terms of the legislation.

Do you foresee this actually going through the Senate in the same way that you see it moving through the House? Or is there a chance that it could bypass the Senate, and you could just end up with a big conference on housing issues that would include both sides?

FRANK: Well, I think we’ll get a big conference, but it won’t bypass the Senate. One of these bills – the Senate has already passed, as you know, FHA modernization. Senator Dodd is planning the markup soon, i.e., a vote in Senate committee on – although the C-SPAN audience may be the one that doesn’t have to be told what a markup is, because it’s a fairly sophisticated group.

But he was going to be doing it, I think, on Wednesday. He’s now delayed it a couple of days, which I think a good sign, because he’s in conversations with some of the Republicans.

I believe that the Senate will pass a version (ph) of it. Nothing is going to pass that just came out of the air from House and didn’t go through the Senate.

Now, in some cases, we’ve done this, too. Sometimes, if one house has passed something and it’s passed committee in the other house, there’s no need to go through the whole floor. Some of that might happen.

RUCKER: Do you feel like largely your work is done? And if so, what more can you do, if so many of these issues have yet to be dealt with in the Senate Banking Committee? You’ve passed so much through your own committee. What is your job over the next …

FRANK: Well, I don’t golf much, so we’ll have to find something.

First of all, it’s one thing to pass it – and we hope they pass it – there’ll still be a lot of specifics. But there are some other issues. There are some consumer issues. There are credit cards.

I want to return – look, as many of you know who cover the committee, our major focus last year, or one of our focal points, was housing – rental housing – because I believe that a partial solution to this whole problem of subprime mortgages is to give some people who shouldn’t own homes, because they can’t really afford it or be organized, a rental housing alternative. So, we’ll be pushing on some of that.

There are some international issues that I want to deal with. Frankly, one of my next hearings will be on the terrible food crisis in the world, because the committee that I chair has jurisdiction over the World Bank and the development banks. And we’re going to be looking at what they can do. So, we’ll be working in those areas.

RUCKER: Well, one other thing you said – to talk about other issues maybe out of the housing realm – but one issue that’s come up through this financial crisis that’s spread into other areas is that there might be need for reform of regulatory structures broadly, that Henry Paulson, Treasury secretary, has outlined a blueprint.

Where can you help on this, if you’re inclined to help?

FRANK: Oh, I’m very much inclined to work on this together with the secretary, and I welcome what he did when he announced it. There were some differences on specifics. We plan very much to work on that.

Now, it’s much too complicated a subject, and actually, and potentially, politically to get done between now and the end of August, which is essentially when we’ll finish anything for the year other than some spending bills. But I will begin hearings on that.

There needs to be some reform. Essentially what we have is a system now in which investment banks, in particular, and hedge funds and others, are able to take risks without enough restraint. And of course, one of the things that happened was, Bear Stearns took enough risks, so they wound up having their customers bailed out by the Federal Reserve.

Now, I think the Federal Reserve acted wisely then. And I have a lot of confidence in the president of the New York Federal Reserve, Mr. Geithner, who did that. But I’d rather not have that happen regularly.

One way to prevent that is to give somebody – the Federal Reserve or somebody else – the power to do some regulating, so these things don’t happen. We will begin very much to start that process. We won’t finish it.

There are a couple of others. We have a bill that was pulled off the floor last week, you know, to increase the powers of the credit unions and do some deregulating of the banks. There were some differences on that, but I think they can be resolved. And I hope to revisit that.

SLEN: You are watching “Newsmakers.” And our guest this week is the financial services chair, Representative Barney Frank.

Next question, Julie Hirschfeld Davis.

DAVIS: You were talking about broader financial regulations. And you’ve mentioned a few times that, if lenders, or the mortgage holders, don’t cooperate with your efforts to allow some of these homeowners to refinance into FHA-backed loans, that you want to regulate – you want to look at regulating that sector more tightly.

That might be a year or more before you know whether they’re going to cooperate. In the interim, what can you do to help homeowners, even if you pass this bill?

FRANK: Well, we will – we’ll know in less than a year. We’ll know in time to legislate next year.

We can press them. I think what we can do is pass a bill of which I am a co-sponsor, which unfortunately got put aside in the Senate, and maybe they can get their votes for it again. And that is to allow homeowners to declare bankruptcy with regard to their principal residence.

There’s a great anomaly in the law, it seems to me. If I have an expensive resort house somewhere, and I don’t want to – I can’t pay the mortgage, I can go bankrupt and not have to pay that mortgage. And if I’m an investor and I own several rental properties, I can go bankrupt and not have to pay the mortgages.

But if it’s my own home that I live in, my primary residence, the law says I can’t use bankruptcy. I think that’s unfortunate. If the holders of paper knew that people might go into bankruptcy, they might have more incentive.

Now, I’m a co-sponsor of that bill. It’s not in the bill that we passed, because it’s not in the jurisdiction of the Financial Services Committee. Bankruptcy is covered by the Judiciary Committee. But I’m for that bill, and I would hope it would pass.

The other thing I would note is, the states have some power here. Foreclosure is a state matter. And I notice California is in the process of passing a much tougher law regarding foreclosure, because the alternative to going into our program will be for them to foreclose.

One of the problems is that people foreclose on the property, and then they don’t do anything about it. You know, if you have foreclosed on property, you’re the owner of that property. If there are things going on on that property, you might be held liable. You’ve got to keep that property boarded up. You might have to fence it off.

If you’re owning property that’s not well maintained, you can get in trouble with the city. So, I think some of the cities may be giving some of these people an incentive not to be the owners of foreclosed property.

DAVIS: Have you pressed your leadership to bring up that bankruptcy provision? Or do you think that’s going to be voted on any time in the next …

FRANK: I don’t know …

DAVIS: … several weeks?

FRANK: Look, in fairness to the democratic tradition of the House, it’s the Senate where it got killed.

But I have discussed it with Speaker Pelosi, and made it clear that I’m for it. I know she is supportive of it. There is a problem about whether or not you have the votes.

RUCKER: Into the weeds again on another issue a little bit more, which is a new regulatory framework. You’ve said in the past that, whereas commercial banks – banks that people just deposit money in – get treated one way; Wall Street banks get treated another.

Can you tell us something about – you seem to have said that there needs to be a harmonization there?

FRANK: Oh, absolutely. That’s what we were talking about for next year.

Commercial banks have always had the right to go to the Federal Reserve to get the kind of help that Bear Stearns – not Bear Stearns, but Bear Stearns’ customers got, because Bear Stearns was wiped out. But the difference is, the Federal Reserve can put regulations on the commercial banks to make it less likely that they will do that, to make sure that they were making better loans, to require them to keep some capital in reserve. That’s one of the big things.

And what we have is investment banks and commercial banks doing many of the same things, but with different rules. And that means the investment banks aren’t well regulated, and they kind of have a negative influence on the commercial banks.

I spoke last year with Charles Prince, who was then the CEO of Citigroup. And there was at the time debate about something called “structured investment vehicles,” which were serious liabilities for the banks and others, but not on the balance sheet, so that you didn’t really know what they owed.

And I asked Mr. Prince – and some others who had said – why he didn’t put the structured investment vehicles on the bank’s balance sheet. And his answer was very revealing.

“Oh, well, if I were to do that, it would put us at a competitive disadvantage vis-a-vis the investment banks” – Bear Stearns and Lehman Brothers and Goldman Sachs and Morgan Stanley.

Well, that’s when the light went off in my head that you can’t have banks – commercial banks and investment banks – doing similar things but with different sets of rules. So, I very much think that’s what’s needed.

RUCKER: And it’s housed in the – the Fed would be the home of …

FRANK: That’s what we have not yet decided.

RUCKER: OK.

FRANK: Here’s the essential point. Thirty years and more, loans, which are very important in our system, were made in the following way. I lent you money, and you paid me back. And because I expected you to pay me back, I was careful who I lent to.

But then came this new phenomenon called securitization, in which I lend you money, and then I take the right to collect from you and I sell it to a lot of people, and I sell part of the right to collect from you. And it’s packaged in our loans.

Well, what happens is, I don’t worry as much about whether or not you can pay back. It’s really that simple.

When you had a tight lender-borrower relationship, people were more careful about loans. And most loans came from banks, from regulated commercial banks.

Now, loans – mortgage loans and others – are made from a whole other range of people. They are securitized. The lender-borrower relationship kept people from taking unwise risks. We’ve lost that. And we now, by regulation, have to find some alternative way of putting some constraint on risk-taking that’s irresponsible.

SLEN: Congressman Frank, do you think, it being an election year, does it benefit you in some of the actions that you’d like to see taken that you’re working with a lame duck president?

FRANK: No. Frankly, I think there would be more political pressure if he was running for reelection.

But I also think – I work with Chairman Ben Bernanke and Secretary Hank Paulson, who really are people who want to do the right thing. And I think, frankly, more of my colleagues here are motivated by, God, this has gotten out of hand, and we really have to do the right thing.

Now, the electoral thing does – but I do think, with the Republican leadership, Mr. Boehner, for reasons I don’t understand, trying to kill this bill, and, frankly, in a way that doesn’t accurately describe it.

We’ve got more Republicans breaking with him – 10 of the 30 on the committee, or 33 – because they have their own electoral pressures. It’s pretty hard to be a Republican from Ohio or Florida these days and say, oh, I’m not going to worry about that. So, the electoral pressures do help us in that sense.

DAVIS: If this goes to a negotiation, a final negotiation with the White House, you’re going to be working closely, as you have been, with the Treasury secretary, Mr. Paulson, and the Fed chairman, Mr. Bernanke.

Can you describe a little bit your relationship with those two? A lot of people would be surprised to hear that you, a Massachusetts Democrat, are so closely allied with them on some of these issues.

FRANK: Yes. One of the things that I think all three of us have is an appreciation for reality. And you can’t always take that for granted. I think we all start out with our values and our ideologies, but we take reality into account.

Temperamentally, to be honest, I have a lot more in common with Mr. Paulson, and he tends to be a kind of a “let’s get right to it.” Mr. Bernanke is a little bit more formal. But all three of us share an understanding of, you know, sometimes reality governs. And that’s been the basis for the relationship. And look, we’re all committed to trying to get this thing done in the right way.

RUCKER: Do you think that – to talk about reality governing – that mostly (ph), the legislative reality of, you know, the good relations you have with Henry Paulson and Ben Bernanke doesn’t always have enough force to get through someone like the minority leader and the Senate Banking Committee, Mr. Shelby, who’s …

FRANK: That’s been an issue. Yes. The Senate is a different place. And Senator Shelby – there have been issues where I’ve agreed with the Bush administration, and Senator Shelby has differed.

On the other hand, I think that may be evolving, too. Again, in fairness to all parties, people didn’t see this as serious, as being as serious an issue as it was, even five or six months ago. There was a recognition of subprime, but there was a hope that it wouldn’t infect the rest of the economy.

So, there have been those issues with Senator Shelby, but I think they’re improving.

RUCKER: If I can ask one other question, which is, you came in as chairman 18 months ago and – I think I have this right – you sort of offered to the financial services industry sort of the grand bargain of fair deals …

FRANK: Not just to the financial services, to business in general.

RUCKER: OK. And that was, I don’t know, some kind of meeting on a plane of some common sense and a certain interplay there.

Is the tone changing a bit? Are you – you haven’t (ph) been satisfied with this offer.

FRANK: No, but it may be coming back. You exactly accurately describe it.

I worry that as our economic and political situation has evolved, even in the years of good growth before this recent bad patch, the average citizen wasn’t getting any of it. Alan Greenspan acknowledged that. Don Evans, who was the secretary of commerce – the first secretary of commerce and George Bush’s personal friend – said in the forum report that he did, five percent of the people are benefiting from the growth, and 95 percent are either not benefiting or they’re going to be worse off.

And what you had in this term was people in the union movement and all sorts saying, OK, no trade deals. We’re not going to agree to some of the deregulation that you might want to do from an efficiency standpoint in the banking area, not from the standpoint of risk-taking.

And what I said to the business community was, look, I know you are frustrated about the inability to get trade deals and other things, but here’s the problem. You tell the average working person that these are good things, because they’ll promote growth. And the average working person says to you, well, that’s all well for you to say, because you’re getting all that growth. My wages aren’t growing anywhere.

So, let’s have a grand bargain. Support unionization. Help us expand health care. Help us get education in the community colleges. In return, you’ll get trade deals, and you’ll get the ability to be more flexible in your practices. And I was disappointed that the business community, I guess didn’t think they needed to do that.

Since then, trade has basically seized up. I know people were very disappointed about the Colombia trade deal. Nancy Pelosi went ahead with the Peru trade deal. I voted with it.

And the administration responded by killing the program called Trade Adjustment Assistance – or letting the Republicans kill it in Congress – which is the very program that compensates workers who lose their jobs because of trade. So, the speaker now says, look, I couldn’t pass that bill if I wanted to.

So, I’m hoping – now, in the area in which I work, the financial services area, the crisis has created a need to cooperate. You know, when people are in serious trouble, they sometimes get along better.

But the broader business community has still not understood the importance of working with us to promote more fairness in the society. And if they get that, then they can get trade. Then they can get some of the other kinds of flexibility they want.

DAVIS: Going back to your plan, Peter headed off with a quote from the Republican leader saying it would help flippers and speculators.

But there are some concerns among people, even on your committee, who understand this issue, that this will help people who borrowed irresponsibly, or who overextended themselves, and really shouldn’t be homeowners at all. They should be renters.

FRANK: That’s a fair question. And …

DAVIS: How do you respond to that?

FRANK: Yes, and unlike, you know, Mr. Boehner wants, well, two things. There are some people who borrowed more than they should have. And they are going to get helped. And in an ideal world, people who made the mistake of borrowing too much probably should be left alone.

The problem we have is this. If you continue to get the same percentage of foreclosures as we’re now getting, it doesn’t just hurt the person whose property is foreclosed, it hurts the whole economy. That’s why, more than anything else, we’re in a recession.

It’s hurts other people in that neighborhood. If you’ve worked hard and you’ve paid off your mortgage, and there’s a foreclosed house across the street or next to you, you’re going to get hurt. It hurts the cities, because people aren’t paying property tax, so you don’t get the services that you would like to get.

So, we are saying, yes, there are some people who are going to get some help who were irresponsible, or they were mistaken. But you know, one of the – yes, they were irresponsible. They didn’t shoot anybody. They didn’t rob anybody. They didn’t beat anybody up. These are people who made the mistake of doing too much for their families.

Now, some of them are people who shouldn’t have owned, because they can’t. They will not benefit from this program.

What we say is, to the private holders of the mortgages, you write down the amount to where it’s more like what it’s worth. In many cases, the person who lived in that house will still not be able to pay. And we are not automatically going to guarantee their mortgages.

We’ve told the Federal Housing Administration, the FHA, in our bill, you look at those and analyze them. And if, even after there’s been a reduction in the mortgage payment, that individual can’t make the payments, then she’ll lose the house. There’s nothing we can do about it.

And by the way, if we do make the guarantee and people start making the payments, and they can’t continue, then we will take the house. I want to stress, not a dollar of federal money will go to compensate the people who have the loans, who write these loans down. Not a dollar of federal money will go to pay off anybody’s mortgage.

If people who get a federal mortgage guarantee fail to continue to pay, then there will be a federal dollar involved, because we’ll have to pay off that mortgage. But in return, we’ll take the house.

SLEN: And finally, Congressman Frank, before we let you go, you mentioned that your next congressional hearing was going to be on the food crisis. President Bush has proposed $700 million in additional worldwide food aid. That and a large headline this week in the “Washington Post” regarding perhaps some more regulation of credit cards. Could you speak to that?

FRANK: Yes. Actually, we had a bill in that my colleague, Carolyn Maloney, was doing, and then some of the senators have been taking the lead – Senator Carl Levin and Senator Chris Dodd.

What we’re saying is this. Credit card companies have had this practice of raising the interest rate on what you owe them retroactively. Now, I think that’s totally wrong.

When you go out and buy something with your credit card, you should know what that rate is. What they’ve said is – it’s called universal default.

I have a credit card, and there’s an amount that I owe the credit card company. I’m not late. I’ve always made my payments on time. I’ve always made the minimum payment or more.

I get in a dispute with another merchant. Maybe I bought a car that was a lemon. Maybe I was falsely charged, in my judgment, too much by another store.

I say to them, I’m not paying that bill. You’ve got to fix it. I’ve always paid my credit card bill. That merchant reports me to the credit bureau, and the next thing you know, the credit card company retroactively raises the interest saying, oh, well, you’re a credit risk. And I’ve got to start paying them more.

We’re even saying in our thing, look, you know what? If, because of that unrelated dispute, you want to raise the rates going forward, give them notice and you can do that. But you can’t retroactively raise the rates.

There were some other things we’ve been doing. If you owe money and you pay part of your bill, they automatically apply that to the part of the bill where the interest rate is the lowest and charge you more for where the interest rate is highest, no matter when it was incurred. We had a bill that we are considering to deal with that.

But you talk about being outflanked. The Federal Reserve, of all places, has now promulgated rules that do – or proposed rules – that do what we were planning to do in the bill. And I’m very happy with that.

So, we frankly feel that we’ve already accomplished some things with credit cards. Now, we are probably still going to try to legislate, because what’s done by regulation can be taken away.

But it does look like, frankly, after we began this process, and Senator Levin in the Senate began the process, the Federal Reserve is now going to give consumers more protection with regard to credit cards.

And one last one that may irritate people. You pay your bill, and the next thing you know, you’re getting hit with a fee, because they say, oh, you didn’t pay your bill on time. And it could have gotten lost somewhere, you might not have had enough time. We’re also, the Federal Reserve, as we would have done in our bill, has even set some fairness rules about what happens if the bill doesn’t get there on time.

SLEN: And finally, the food crisis.

FRANK: Our piece of the food crisis is very specific. We have the right to supervise America’s relation with the World Bank and the other development banks. And we’re going to be looking at what they do.

There is one related thing. The committee I chair, I’m very proud to say, with my Republican colleague, the senior Republican, Mr. Bachus, as the main sponsor, just got the House to adopt a bill to begin debt relief to the 20 poorest countries, another round of debt relief.

And of course, one way you help countries like that is, instead of having to pay off debts – many of which were incurred by previous, corrupt rulers. You know, Idi Amin left Uganda with a lot of debt. We forgave that debt. That was the right thing to do. That’s another way to try to help.

SLEN: Congressman Barney Frank is chairman of the House Financial Services Committee, our guest on “Newsmakers” this week. Thank you, sir.

We’ll be right back with our reporters.

(BREAK)

SLEN: We just finished talking with representative Barney Frank, who is chairman of the House Financial Services Committee. We still have Julie Hirschfeld Davis of the Associated Press, and Patrick Rucker of Reuters here to kind of analyze what we heard the chairman say.

And let me throw this out. I heard that it sounds like this legislation will become law, and that the president will sign it. Am I reaching too far?

DAVIS: Well, I think that’s certainly Chairman Frank’s expectation, based not only on his conversations privately with the Treasury secretary and the Fed chairman, but also based on the fact that almost a third of the Republicans on his committee supported it. And it sounds like he expects a similar proportion of the House to do so as well next week.

So, I guess we’ll see. But he seems to think there’s a fairly good chance of that.

SLEN: Patrick Rucker, go ahead.

RUCKER: Yes. I think that he has done a remarkable thing in the last number of months in terms of, there are so many different proposals in terms of how to deal with the housing crisis. And most of them, as Henry Paulson, the Treasury secretary said, fell under their own weight. They were too ambitious. They were too costly.

He months ago had conceived this idea of a way to give a federal guarantee to troubled loans, while sharing the risk and the cost among different players. And that’s gotten quite a bit of momentum. It’s got the companion legislation that’ll be in the Senate.

And not only that, you’ve got the administration coming out with sort of a me-too proposal, which is trimmed down, but it does some of the same things administratively.

So, I think even now you could say he’s done quite a lot to move things forward, even if the bill doesn’t pass.

SLEN: Has the Financial Services Committee been an activist committee under Congressman Frank?

RUCKER: They certainly seem to have been ahead of other people. He doesn’t seem to be very restrained by, well, much of anything. He just moves along with the pace that he wants to move, which tends to be faster than his Senate colleagues in the Senate Banking Committee, and typically, as well, within the administration.

DAVIS: And I think what we saw last year was that a lot of these initiatives that, as Patrick said, came sort of before people realized the gravity and the breadth of the problem, he was able to get through his committee and through the House with bipartisan support. They did a whole subprime bill. They did a bill on regulating Fannie Mae and Freddie Mac, the FHA modernization that the president has been calling for Congress to take final action on.

Not only did he sort of line all that up and bring it over the finish line in the House, but he did so in a bipartisan way, which is important now, if we’re going to see final action on anything that gets signed by the president.

SLEN: And finally, before we let you go, the credit card situation. How big is this going to be?

DAVIS: Well I think – I mean, this is one of the huge issues that’s out there, the consumer issues that’s out there, that still has people worried. And frankly, even if Congress comes out with a great housing plan that gets signed by the president, it’s still going to be out there as a big worry.

So, I think, and we heard the chairman say, is that they feel like they’ve done quite a bit in prodding the administration to do something unilaterally, even if Congress doesn’t act on that itself. So, I think that’s going to be a huge area of focus.

RUCKER: Delinquencies are up among credit card accounts. And this is – obviously, this is very close to the hearts and minds of many voters.

And he does have a lot of allies on this, as he mentioned – Senator Levin, Chris Dodd, his sort of counterpart in Senate Banking Committees. This is something you can see a lot of politicians can easily get behind.

SLEN: Julie Hirschfeld Davis, Associated Press, Patrick Michael Rucker of Reuters have been our reporters today on “Newsmakers.” Thank you.

DAVIS: Thanks.

RUCKER: Thank you.

END