Even as he favored a broader exemption from risk retention than currently proposed, Rep. Barney Frank said Monday regulators should not undermine skin-in-the-game rules by turning the exception into the rule.

In remarks to the National Press Club, the Massachusetts Democrat criticized a diverse alliance of mortgage lenders, lawmakers of both parties and consumer advocates waging a campaign to expand the exemption. Frank said their drumbeat that the rules will hurt lending ignores the effects that zero risk retention had in the crisis.

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