NU Online News Service, Jan. 7, 3:50 p.m.EST

Rep. Michele Bachmann, R-Minn., plans to introduce legislationrepealing the Dodd-Frank financial services law, calling it "misguided" and a"blatant abuse of power."

A key criticism by Rep. Bachmann is a provision in the law thatallows the federal government to take over failing non-bankinstitutions, such as American International Group, according toRep. Barney Frank, D-Mass., former chairman of the House FinancialServices Committee and a prime architect of the legislation.

In a statement, Rep. Frank said another key objection to thelegislation by Rep. Bachmann and her conservative supporters is thecreation of the independent Consumer Financial ProtectionBureau.

The provision empowering Treasury to deal with failinginstitutions was primarily added because, before Dodd-Frank, thefederal government had no authority to oversee failingnon-banks.

The Treasury and Federal Reserve Board at one point loaned AIG$191.4 billion in cash, plus provided guarantees for its commercialpaper only through the Fed's authority to deal with extraordinarythreats to the financial system.

Rep. Bachmann's plans were disclosed in a "Dear Colleague"letter sent Wednesday seeking co-sponsors for her legislation.

She said her bill has the support of the Club for Growth.

In her request for co-sponsors, Rep. Bachmann said, "Dodd-Frankblew down the doors of responsible regulation and grossly expandedthe size and scope of the federal government."

She added that, as enacted, Dodd-Frank empowers the Treasury totarget and take over bank and non-bank financial institutions thatit deems dangerous or at risk.

Further, it grants to the newly created Stability OversightCouncil (10 agents from Treasury and Federal Reserve) full power toorder Title II seizures and activity-control of any bank for anyreason, with a two-thirds vote.

"This is a frightening abuse of power and will do nothing butstymie our recovery," Rep. Bachmann said.

"Dodd-Frank does nothing to address taxpayer-funded liabilitieslike Fannie Mae and Freddie Mac, and will disproportionately hurtsmall, community banks," she said.

"It is plain hubris to think that this government, with its $14trillion debt, annual deficits and wasteful-spending, is worthy ofthis plenipotentiary oversight," she said.

"Additionally, the unconstitutionality of Dodd-Frank should beobvious to all," she stated.

In his comments, Rep. Frank said the Bachmann effort to repealthe new financial reform law "reveals the hypocrisy of right-wingclaims that they are concerned with ending uncertainty in theeconomy."

"Now that we have put in place a set of rules that allowfinancial markets to function but which also curb their excesses,Rep. Bachmann and her allies want to reintroduce uncertainty bygoing back to exactly the situation that led to the financialcrisis in the first place."

He added, "It is worth noting that what appears to be their mostserious objection–at least as stated here, since abolishing theindependent Consumer Financial Protection Bureau remains one oftheir highest priorities–is that the law grants authority to theTreasury to deal with failing institutions."

He said this provision closely follows a proposal suggested bythe Bush administration in 2008, "when its top economic officialsnoted that the absence of such authority was a major exacerbatingfactor to the deep recession into which we plunged.

"A number of Bush appointees had a role in shaping the finallegislation," he said.