Democrat Barney Frank, who authored tough post-financial crisis banking rules, was appointed to the board of directors of New York-based Signature Bank on Wednesday.
Frank retired from Congress in January 2013 and is now an author, NBC contributor and public speaker.
Frank was key architect of Dodd-Frank financial reform law
Retired House Democrat Frank, one of the namesakes of the 2010 Dodd-Frank financial-reform law, is joining the Signature Bank board. The former chairman of the House Financial Services Committee was instrumental in drafting the 2010 law.
Analysts note the the pairing seems odd, given that Frank has frequently championed for more banking regulations often opposed by the industry.
In his statement, Frank said: “As a commercial bank catering primarily to privately owned businesses, Signature Bank knows firsthand the importance small business plays in the health and vibrancy of our nation’s economy”. He added: “I am excited to be part of all this in my new capacity as board member and in working with the other directors and management.”
Scott Shay, Signature’s chairman, said in Wednesday’s release: “We specifically seek members whose deep and broad experience will prove impactful to the bank, those who share diverse perspectives and possess strong decision-making capabilities”.
Exuding confidence over Frank’s appointment, Shay said the former House Democrat would bring “keen insights, far-reaching industry knowledge and vast intellect to his role as well as to our institution and the Bank’s shareholders”.
However, it isn’t clear exactly how much money Frank will make from his new job. Signature typically pays its directors about $60,000 a year in cash and also gives them stock. Frank was granted 1,913 shares with a market value of about $280,000 that will vest next March.
Barney Frank likes Signature Bank’s business model
Signature Bank was launched in 2011. It now has about $29 billion in assets and primarily serves small businesses around New York. The bank is so low-key that it doesn’t have external signage and its branches are inside office buildings.
Frank served in Congress for over 30 years. The appointment is Frank’s first to a bank board since retiring from Congress in 2013. He succeeds former board member Alfred DelBello, a onetime lieutenant governor who died last month.
Fourteen-year old Signature bank has been growing rapidly and performing well at a time when other banks have struggled. Last quarter, it posted its 22nd consecutive quarter of record earnings.
Expressing satisfaction over Signature’s business model, Frank said: “I like this business model in particular. They don’t get involved with exotic derivatives and credit default swaps”. Interestingly, he described himself in an interview as “very supportive of banking”.
Frank was also instrumental in crafting the short-term $550 billion rescue plan in response to the nation’s financial crisis.
In her speech at the Levy Institute’s annual Hyman P. Minsky Conference last April, Senator Elizabeth Warren laid out a set of proposals to advance the process of financial reform that began with the enactment of the Dodd-Frank Act of 2010. She complimented Barney Frank and Chris Dodd for their leadership.
Last March, Frank said more individuals need to be prosecuted and jailed for financial crimes. He also defended his role in the growth of subprime lending, saying that foreign money and unregulated securitization were systemic changes that sparked the financial crisis.