April 17 (Bloomberg) -- The U.S. Chamber of Commerce, which has long complained that accounting rules in the Sarbanes-Oxley corporate-governance law are too onerous, found a sympathetic ear from an unlikely person last month: Representative Barney Frank.

The problem, Frank told the nation's largest business lobby in a March 14 speech, is that accountants were given too much leeway in writing that provision.

``Let's always remember the principle that you should not rely excessively on your barber as to whether or not you should get a haircut,'' said the Massachusetts Democrat.

That comment showed Frank hasn't curbed his sharp tongue since assuming the chairmanship of the House Financial Services Committee in January. It also reassured the financial community that he's not the anti-business crusader many had feared.

``He is a more balanced policy person than some might have assumed,'' said Representative Richard Baker, a Louisiana Republican who's also on the committee. ``He has sensitivity not to unnecessarily disrupt market function.''

Frank, the target of Republican campaign attacks last year warning of his liberal views and what former Representative John Hostettler of Indiana called a ``radical plan to advance the homosexual agenda,'' has been anything but extreme since taking over the panel. In addition to siding with executives seeking to curtail Sarbanes-Oxley, he has resisted pressure to regulate hedge funds and backed subsidies to help insurers manage terrorism-related claims.

`Dangerous to Debate'

At the same time, Frank, who is 67 and gay, has moved out of committee legislation that would allow shareholders to conduct an annual non-binding vote on executive pay plans. He has also taken aim at such issues as growing income inequality in the U.S. and the collapsing subprime housing market, which is disproportionately hurting poorer homeowners.

And he hasn't lost any of the edge that's earned him a reputation as one of the funniest and smartest members of Congress. At sometimes staid congressional hearings, he often catches colleagues and committee witnesses off guard with a glib one-liner or a biting remark.

``It's dangerous to debate him if you don't know the subject,'' said Representative Spencer Bachus of Alabama, the panel's highest-ranking Republican.

On Feb. 7, David Heyman, director of the homeland-security program at the Washington-based Center for Strategic and International Studies, appeared before the committee to speak against allowing national-security concerns to prompt new barriers to foreign investment in the U.S.

`I Can't Resist'

``So with all do respect to the members of this committee: It's the economy, stupid,'' Heyman wrote in his prepared remarks.

``Mr. Heyman, I can't resist,'' Frank said after his testimony. ``When you misspell a three-letter word, don't call people stupid,'' Frank said to laughter from the audience as he pointed out that Heyman miswrote the word due as ``do.''

Frank's colleagues on the committee haven't noticed him toning down his feisty personality. What has changed are the priorities for the 70-member panel, which oversees the Federal Reserve and the Securities and Exchange Commission and sets policy for the banking, securities and mortgage industries.

As chairman since the Democrats regained control of Congress, the 14-term lawmaker has ``changed the policy debate more to consumer issues and economic-inclusion issues,'' Federal Deposit Insurance Corp. Chairman Sheila Bair said in a telephone interview.

Trade, Salaries

Frank, who grew up in Bayonne, New Jersey, and received undergraduate and law degrees from Harvard University, calls his agenda a ``grand bargain'' with corporate America: Congress would support favorable trade and immigration policies in exchange for higher worker salaries and increased support for labor unions.

``I want the private sector to make a lot of money and I want some part of the money it generates to be used for social purposes,'' Frank said in an April 4 interview in Boston.

The idea to correct what he calls ``economic inequality'' was sparked in the 1990s, when he said he began noticing that the benefits of globalization and technological progress weren't evenly distributed.

Housing prices have soared while salaries have stagnated among average Americans, leading him to conclude that most people aren't gaining from the nation's economic growth. Frank's committee has held hearings on both creating more affordable housing and alleviating the subprime mortgage crisis.

Grand Ideas

``It is somewhat unusual for a committee chairman to conceptualize on such a grand scale,'' Steve Bartlett, president of the Financial Services Roundtable, a Washington-based group that represents banks, insurers and securities firms, said of the ``grand bargain.''

``The industry is thinking about it because it's a new approach,'' said Bartlett, a former member of the Financial Services panel. ``We'll just wait and see how the details will play out.''

Frank has sometimes found the transition from minority member to chairman disconcerting.

``Most of my life, I had strong views about things and I was trying to figure out how to get them adopted,'' he said. Now ``I find that I have more power than knowledge. I really got to work at it. What to do about subprime? What to do about private equity?''

Bomb-Sniffing Dogs

Frank said his new role began sinking in on Feb. 15, when for the first time he presided over a hearing featuring Federal Reserve Chairman Ben Bernanke's semi-annual report to Congress. Later that day, bomb-sniffing dogs swept through his office before a meeting at which he was to discuss debt relief with Liberian President Ellen Johnson-Sirleaf.

``It's almost like this second life,'' Frank said. ``I still got to get up in the morning and toss the garbage. But then there are these sort of elevated things you do.''

There's also what Frank calls the ``excessive deference'' often given to a committee chairman.

``People insist on holding doors for me when I'm balancing three hot cups of coffee,'' said Frank, who unlike other lawmakers, prefers to get by without a Blackberry device and drives himself around town.

``My life has changed some in that I'm now able to do a lot fewer other things,'' Frank said. ``Very little of my work is now outside the committee.''

`Around the Clock'

Edward Lambert, the mayor of Fall River, Massachusetts, in his congressional district, said Frank remains attentive to his district.

``He must be working around the clock because he hasn't skipped a beat here,'' Lambert said.

Frank is more relaxed back in his district, taking time to chat with constituents and disarming them with his humor, plain- spoken style and grasp of the issues.

``He's much brighter than the average guy, but he relates well to the average guy,'' said Ken Cabral, 64, a retired elementary school principal from Norton who came to hear Frank speak on April 5 at the town's public library.

Arriving at this point in his career has taken some personal sacrifice, said Frank.

``When I first ran for office, if I had been open about being gay I probably wouldn't have gotten anywhere,'' Frank said. ``And so I hid my sexuality and repressed it for a long time. That was the biggest price I paid.'' He is in a relationship now, but declined to name his partner.

Frank, who said he plans to retire in five years, would have considered a run for the Senate seat if not for the Democrats' 2006 win that landed him in the chairmanship.

``I've always wanted to move to some extent the country, the world in the direction that I think it should be going,'' Frank said in a February interview in his Washington office.

``And I have more ability now to accomplish things for poor people, against racial discrimination, et cetera than I ever thought I would,'' said Frank. ``There's nothing else I would leave this job for.''

To contact the reporter on this story: Alison Vekshin in Washington at avekshin@bloomberg.net.

Last Updated: April 17, 2007 00:08 EDT