* Frank: Dems will resist on SEC, CFTC budgets
* Frank: Concerned about consumer protection, derivatives
* Rep Neugebauer introduces bill on consumer bureau
* Senate panel sets Feb. 17 hearing on Dodd-Frank
(Adds Neugebauer bill, comment; committee hearing)
By Kevin Drawbaugh
WASHINGTON, Feb 10 Democrats will resist
Republican attempts to weaken Dodd-Frank financial reforms
through underfunding key U.S. regulatory agencies,
Representative Barney Frank told Reuters on Thursday.
"We intend to make a fight," Frank, senior Democrat on the
House Financial Services Committee, said in an interview as
House Republicans agreed to pursue deep government spending
cuts in the name of combating the soaring budget deficit.
"I'm worried that (committee Republicans) are complicit
with the appropriators in underfunding the SEC and the CFTC.
That's the biggest problem," Frank said.
The Securities and Exchange Commission and the Commodity
Futures Trading Commission must implement and enforce scores of
new rules under last year's Dodd-Frank legislation, approved in
the wake of the 2007-2009 financial crisis.
Republicans opposed Dodd-Frank last year and have
acknowledged they hope to weaken it by using their new-found
power over the government's purse strings.
Last month, Republican Rep. Scott Garrett, chairman of the
capital markets subcommittee, said that restraining funding for
regulatory agencies would be one way "to throttle" portions of
the Dodd-Frank bill.
Frank, whose name is on the legislation, was chairman of
the financial services panel before Republicans won control of
the House in November's congressional elections.
Two key components of Dodd-Frank call for new rules on the
previously unregulated off-exchange derivatives market, and
setting up a Consumer Financial Protection Bureau (CFPB) to
shield consumers from predatory and abusive practices.
"I have some concern that they will try to undermine ...
derivatives and the consumer protection," Frank added.
"I don't think there's much they can do about consumer
protection. But they can underfund the CFTC and the SEC. Those
are the two areas where I think they are most eager to weaken
things and I think inaccurately."
Asked whether Democrats would be able to protect proposed
budget increases for the SEC and CFTC, Frank said:
"I don't know about the funding. Obviously there is this
overall concern about the deficit, but the amounts (for the
agencies) are so small, I just don't know."
Republican Representative Randy Neugebauer said on Thursday
he has introduced a bill to move the CFPB out of the Federal
Reserve, where Dodd-Frank put it to bolster its independence,
and into the Treasury Department.
Such a move would reduce the bureau's autonomy by putting
its budget through the congressional appropriation process.
"Given the significant and perhaps over-regulating powers
the CFPB has been given by the Obama administration, Congress
must have a say on the appropriation of taxpayer money funding
this agency's operation," Neugebauer said.
Top regulators, including Federal Reserve Chairman Ben
Bernanke, will testify on Dodd-Frank on Feb. 17 to the Senate
Banking Committee, still under Democratic control.
Bernanke will be joined by Federal Deposit Insurance Corp
Chairman Sheila Bair, SEC Chairman Mary Schapiro, CFTC Chairman
Gary Gensler and acting head of the Office of the Comptroller
of the Currency John Walsh.
(Additional reporting by Dave Clarke; editing by Carol