Frank: Still favors independent financial watchdog

WASHINGTON (Reuters) - U.S. Representative Barney Frank, the Democratic chairman of a key House committee, said on Friday in a CNBC interview that he still favors establishing an independent agency on protecting financial consumers.

A bill being debated in the Senate would put the consumer watchdog first proposed by President Barack Obama inside the Federal Reserve. The House in December approved a bill, steered to passage by Frank, with an independent watchdog agency.

Frank also said it will be important for financial reform legislation to require lenders who package loans for resale as securities onto the secondary debt market to retain some percentage of the portfolio risk.

(Reporting by Kevin Drawbaugh; Editing by James Dalgleish)