I looked yesterday at what Barney Frank’s retirement would mean for the all-important House Financial Services Committee. The next in line to represent Democrats as the leader of that committee is Maxine Waters, and I thought there would be significant pushback to her attaining that leadership role. It turns out that I was right. There’s already some significant rumbling about passing over Waters as lead Democrat on the committee, potentially the chair if and when Democrats take back the House.

Wall Street executives are bracing for the possibility that Rep. Maxine Waters will take over as the top Democrat on the House Financial Services Committee after Rep. Barney Frank (D-Mass.) retires.

Waters, an outspoken California liberal who is considered to the left of Frank on financial and housing issues, suggested in a statement Monday that she is laying the groundwork to become the senior Democrat on the panel.

“As the next most senior member of the committee, the current ranking member on the Capital Markets subcommittee and the former chair of the Housing and Community Opportunity subcommittee, I hope to use my experience to continue and expand his work in the committee,” Waters said.

The Hill follows with a litany of anonymous financial services operatives smearing Waters, calling her “not a good face of the issues” or “too much of a bomb thrower.” After years of high unemployment caused by the collapse of the Wall Street casino, with aggressive bailouts and outsized profits for Wall Street and nothing for regular folks, I would argue that a bomb thrower matches the rhetorical needs of the moment.

The ongoing ethics investigation into Waters pushing the Treasury Department to help OneUnited Bank, where her husband had some financial interests, could play a role in the succession as a pretext , offering the leadership a way to nix Water’s ascension if they so choose. The ethics case is on pretty shaky ground, and has frequently been used to discredit Waters, particularly after she has come on too strong in questioning the banks. Waters has been very dogged on robo-signing and foreclosure fraud, even to the point of recommending prosecutions.

Frank was knowledgeable on the issues, and had much to recommend. But he certainly played both sides of the fence when it came to banking issues. Though he’s been tarred as someone who single-handedly took down the economy, in reality he was generally not as aggressive on many elements of Dodd-Frank as he could have been. Certainly he was seeking a consensus to get the bill passed, and he protected many important parts of the bill in subtle ways. But Waters has been far more out front on the housing issues.

This is why you’re hearing what amounts to a whisper campaign against her. I’ve heard a lot of criticisms of her basic knowledge of financial issues and playing up of an ethics investigation that has been on the verge of collapse for months.

The politics of who gets the spot will be tied up in various coalitions. The seniority succession behind Frank is Waters, Carolyn Maloney, Luis Gutierrez, Nydia Velazquez and Mel Watt. Maloney is generally OK on these issues, but she represents a large chunk of Manhattan and she just this week is pushing a bill that could gut derivatives regulation. Gutierrez and Velazquez are Congressional Hispanic Caucus members, while Congressional Black Caucus member Watt represents Charlotte, home of Bank of America.

There are arguments on both sides for Waters. But while it may look like political coalitions will determine who gets the job, it will be her anti-bank advocacy that will actually seal the deal, in all likelihood. If she does ascend to the top spot, it’s an indication that Democrats are more comfortable with an anti-Wall Street message, at least rhetorically.

David Dayen

David Dayen

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