WASHINGTON—Rep. Barney Frank, D-Mass., today defended the Dodd-Frank Act, and said it is unlikely it will be reversed by Republicans. He also said he would oppose creation of a self-regulatory agency for financial advisors.

Frank made his comments as keynote speaker of the Consumer Federation of America’s 24th annual financial services conference.

Frank announced earlier this week that this will be his last term in Congress. He opened his remarks in his typical tongue-in-cheek fashion by saying that he felt his retirement announcement Monday was not the reason for the strong stock market rally this week.

In comments to reporters after his appearance, and in Wednesday comments, he said he would oppose creation of self-regulatory agencies that would shift oversight of investment advisors from the Securities and Exchange Commission.

Draft legislation on this issue was proposed in September by Rep. Spencer Bachus, R-Ala., chairman of the House Financial Services Committee, where Frank now serves as ranking member. It is possible that such legislation could be introduced at any time.

“I’m skeptical of self-regulatory agencies,” Frank said. “I would not want to detract at all from the responsibilities of public agencies.”

The SRO proposal has industry support, both from the National Association of Insurance and Financial Advisors and the Association for Advanced Life Underwriting.

At the same time, Frank used the bailout of American International Group as a means of defending provisions of the law that eliminated the ability of the Federal Reserve Board to bailout out troubled institutions, like AIG.

In his comments on AIG, Frank implicitly touched on issues raised at a hearing of a Financial Services committee subcommittee Nov. 16 that sought to weaken DFA by limiting the ability of the Financial Services Oversight Council to monitor insurers and have them pay the costs of a failure of a “too-big-to-fail” institution, like AIG.

Frank, in his CFA appearance, also criticized efforts by Republicans to weaken enforcement and implementation of DFA.

He said Republicans are doing this by attempting to attach riders to appropriations bills that limit implementation of controversial provisions, and also by reducing funding of the SEC and the Commodity Futures Trading Commission in order to limit the agencies from writing the rules needed to implement the law as well as enforce its provisions and intensify oversight of market players.

He cited the SRO issue as an example.

He said Republicans have resisted giving the SEC the increased funding called for in the DFA law. But, he contended that the G.O.P. majority on the FSC then engage in what Mr. Frank refers to as a self-fulfilling argument: An SRO is required because the SEC doesn’t have the resources to police advisers.

Frank said: “I have an answer to that. Give the public agencies enough money.”

Officials of two trade groups representing insurance agents and brokers today voiced strong support for proposed legislation that would authorize one or more self-regulatory organizations, or SROs, to examine SEC-registered investment advisers.

In fact, officials of the National Association of Insurance and Financial Advisors and the Association for Advanced Life Underwriting said at a congressional hearing that the SEC should focus more on ensuring greater oversight of financial advisors than it is on a rule imposing a uniform fiduciary standard on sale of investment products.

He said that the so-called “too-big-to-fail” policies used previously to passage of DFA has been replaced by provisions in DFA that allow a troubled large financial firm to “die,” but allow federal regulators the power without the need to consult Congress to provide funds that prevent “contagion” stemming from the losses of the failed institution from affecting the overall economy.

He said that when the problems of Lehman Bros. and AIG came up in September 2008, members of Congress were told they would either have to protect all debt holders and equity holders, or let the institution fail.

“Neither policy is appropriate,” Frank said. He explained that under DFA, regulators have the power to pay off debts of the failing institution regulators deem necessary to prevent systemic problems, but not all debts, or, he explained, “pick and choose.”

Furthermore, he said, under DFA, it is the private sector, not the government, that must pay back the funds loaned to prevent the failure of the institution from affecting the entire economy.

Insurers are especially concerned about these proposals.

At a recent hearing of a subcommittee of the House FSC, property and casualty insurers and officials of the Council of Insurance Agents and Brokers, voiced support for such bills.

One would end the authority of the Financial Stability Oversight Council to subpoena the records of insurers and to ask them directly for financial data.

Under one draft bill, the FSOC would have to work through the National Association of Insurance Commissioners to get this data. Industry officials privately point to the decision of the Federal Reserve Board to limit the authority of MetLife to raise its dividend as one reason for justifying such legislation.

Another would “explicitly and entirely” exclude insurance companies, including mutual insurance holding companies from the Federal Deposit Insurance Corporation’s “orderly liquidation authority” for troubled large non-banks.

The third would “preclude” the Federal Reserve from establishing higher prudential financial standards to troubled insurance companies it would oversee as ordered by the FSOC.

The draft bill would also prohibit the FDIC from obtaining a lien on an insurance company’s assets without the written consent of the insurance company’s state regulator.

Another proposal would prohibit the FDIC from counting insurance assets, liabilities, or revenues in its assessments on financial firms to pay for shortfalls when the assets of a failed firm are insufficient to pay for the failed firm’s resolution under the FDIC’s “orderly liquidation authority.”

Frank cited overwhelming public support for DFA, as well as acknowledgment that even Republican legislators highly critical of it acknowledge that it was necessary.

Melanie Waddell, editor of the Practice Channel on AdvisorOne.com contributed to this report.