Former Rep. Barney Frank, D-Mass., credits FSOC with newly SEC-approved money market rules.

Former Rep. Barney Frank, D-Mass., said Wednesday that he supported the Securities and Exchange Commission moving ahead in passing a final money market fund rule and credited intervention by the Financial Stability Oversight Council for pushing the rule into being.

“We are going to get some regulation of money market funds now because of the FSOC, because they intervened,” Frank told members of the House Financial Services Committee, of which he was chairman, during a hearing titled “Assessing the Impact of the Dodd-Frank Act Four Years Later.”

The outspoken former congressman also commented on several other aspects of the financial reform law that bears his name, including SEC fiduciary rulemaking and mortgage-related rules.

As to money market funds, the group of 10 regulators that form FSOC voted in late 2012 to advance three reforms to the funds after former SEC Chairwoman Mary Schapiro — a member of FSOC at the time — had failed to get three commissioners at the agency to support her proposed reforms. Schapiro stated at the time the issue of money market fund reform “is too important to investors, to our economy and to taxpayers to put our head in the sand and wish it away.”

However, current SEC Chairwoman Mary Jo White said during her remarks before the Senate Banking Committee last March that money market funds are “investment products and the SEC should take the lead” in writing further rules to reform them. White then made issuing a final money market fund rule a priority for 2014.

Frank also told reporters after his testimony that he believes the SEC should move forward with a rule to put brokers under a fiduciary mandate, calling the rulemaking an “important” part of Dodd-Frank. He added that regulators like the SEC and Commodity Futures Trading Commission would be “much” further along in their Dodd-Frank rulemakings if they hadn’t been “starved” by GOP lawmakers for funds.

During comments regarding his namesake financial reform bill, Frank also said Wednesday that he didn’t believe that “asset managers or insurance companies that just sell insurance are systemically important,” and should not be labeled as systemically important financial institutions (SIFIs) by the FSOC.

In response to a question by Rep. Scott Garrett, R-N.J., chairman of the Capital Markets Subcommittee, as to whether it was his intention that a nonbank designated by FSOC as a SIFI be regulated as a nonbank SIFI “in perpetuity,” Frank responded: “No. I’ve been very skeptical of them [FSOC] doing that,” adding that he’d sent a letter to FSOC regarding the issue.

One of the most important “pieces” to the Dodd-Frank Act is “risk retention in mortgage lending,” Frank said, as the ability to make bad loans was at the root of the financial crisis. “I’m troubled that there won’t be more risk retention,” he said. “That was the single biggest issue [in the law], and I’m a little nervous as to what’s happened to it.”

Check out SEC Approves Tighter Money Fund Rules on 3-2 Vote on ThinkAdvisor.