Dodd–Frank Wall Street Reform and Consumer Protection Act
| Long title | An Act to promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail", to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes. |
|---|---|
| Nicknames | Dodd–Frank Act |
| Enacted by | the 111th United States Congress |
| Effective | July 21, 2010 |
| Citations | |
| Public law | Pub. L. 111–203 (text) (PDF) |
| Statutes at Large | 124 Stat. 1376–2223 |
| Codification | |
| Acts amended | Commodity Exchange Act Consumer Credit Protection Act Federal Deposit Insurance Act Federal Deposit Insurance Corporation Improvement Act of 1991 Federal Reserve Act Financial Institutions Reform, Recovery, and Enforcement Act of 1989 International Banking Act of 1978 Protecting Tenants at Foreclosure Act Revised Statutes of the United States Securities Exchange Act of 1934 Truth in Lending Act |
| Titles amended | 7 U.S.C.: Agriculture 12 U.S.C.: Banks and Banking 15 U.S.C.: Commerce and Trade |
| Legislative history | |
| |
| Major amendments | |
| Economic Growth, Regulatory Relief and Consumer Protection Act | |
| United States Supreme Court cases | |
| |
The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010.[1] The law overhauled financial regulation in the aftermath of the Great Recession, and it made changes affecting all federal financial regulatory agencies and almost every part of the nation's financial services industry.[2][3]
Responding to widespread calls for changes to the financial regulatory system, in June 2009, President Barack Obama introduced a proposal for a "sweeping overhaul of the United States financial regulatory system, a transformation on a scale not seen since the reforms that followed the Great Depression." Legislation based on his proposal was introduced in the United States House of Representatives by Congressman Barney Frank (D-MA) and in the United States Senate by Senator Chris Dodd (D-CT). Most congressional support for Dodd–Frank came from members of the Democratic Party; three Senate Republicans voted for the bill, allowing it to overcome the Senate filibuster.[4]
Dodd–Frank reorganized the financial regulatory system, eliminating the Office of Thrift Supervision, assigning new jobs to existing agencies similar to the Federal Deposit Insurance Corporation, and creating new agencies like the Consumer Financial Protection Bureau (CFPB). The CFPB was charged with protecting consumers against abuses related to credit cards, mortgages, and other financial products. The act also created the Financial Stability Oversight Council and the Office of Financial Research to identify threats to the financial stability of the United States of America, and gave the Federal Reserve new powers to regulate systemically important institutions. To handle the liquidation of large companies, the act created the Orderly Liquidation Authority. One provision, the Volcker Rule, restricts banks from making certain kinds of speculative investments. The act also repealed the exemption from regulation for security-based swaps, requiring credit-default swaps and other transactions to be cleared through either exchanges or clearinghouses. Other provisions affect issues such as corporate governance, 1256 Contracts, and credit rating agencies.
Dodd–Frank is generally regarded as one of the most significant laws enacted during the presidency of Barack Obama.[5] Studies have found the Dodd–Frank Act has improved financial stability and consumer protection,[6][7] although there has been debate regarding its economic effects.[8][9] In 2017, Federal Reserve Chairwoman Janet Yellen stated that "the balance of research suggests that the core reforms we have put in place have substantially boosted resilience without unduly limiting credit availability or economic growth."[10][11] Some critics argue that it failed to provide adequate regulation to the financial industry;[12] others, such as the American Action Forum and RealClearPolicy, argued that the law had a negative impact on economic growth and small banks.[13][14] In 2018, parts of the law were repealed and rolled back by the Economic Growth, Regulatory Relief, and Consumer Protection Act.[15][16][17]
- ^ Miller, Rena S. (2019). The Dodd-Frank Wall Street reform and Consumer Protection Act : Title VII, derivatives. Washington D.C.: Library of Congress. Congressional Research Service (CRS).
- ^ Lovegrove, Nick (March 2, 2017). "What You Should Know About Dodd-Frank and What Happens If It's Rolled Back". Harvard Business Review. ISSN 0017-8012. Retrieved August 3, 2021.
- ^ Konczal, Mike (July 21, 2015). "This is Obama's most underrated achievement". Vox. Retrieved August 3, 2021.
- ^ "U.S. Senate: U.S. Senate Roll Call Votes 111th Congress – 2nd Session". www.senate.gov. Retrieved July 20, 2021.
- ^ Guida, Victoria; Warmbrodt, Zachary (May 21, 2018). "Trump wounds but can't kill Obama's Wall Street rules". Politico.
- ^ "The Impact of the Dodd-Frank Act on Financial Stability and Economic Growth" (PDF). Brookings. October 24, 2014. Archived (PDF) from the original on September 5, 2017. Retrieved August 31, 2017
- ^ Martin Neil Baily; Aaron Klein; Justin Schardin (2017). "The Impact of the Dodd-Frank Act on Financial Stability and Economic Growth". RSF: The Russell Sage Foundation Journal of the Social Sciences. 3 (1): 20. doi:10.7758/RSF.2017.3.1.02. S2CID 157075377.
- ^ "Did Dodd-Frank really hurt the US economy?". Financial Times. February 13, 2017. Archived from the original on January 24, 2018. Retrieved January 23, 2018.
- ^ Lux, Marshall; Robert, Greene (2015). "The State and Fate of Community Banking". Harvard Mossavar-Rahmani Center for Business and Government. Archived from the original on January 20, 2017. Retrieved January 21, 2017.
- ^ "Speech by Chair Yellen on financial stability a decade after the onset of the crisis". Board of Governors of the Federal Reserve System. Retrieved August 3, 2021.
- ^ Schroeder, Howard Schneider, Jonathan Spicer, Pete (August 25, 2017). "Yellen: Financial rules have made economy stronger, changes should be 'modest'". Reuters. Retrieved August 3, 2021.
{{cite news}}: CS1 maint: multiple names: authors list (link) - ^ Wilmarth, Arthur (January 2011). "The Dodd-Frank Act: A Flawed and Inadequate Response to the Too-Big-To-Fail Problem". Gw Law Faculty Publications & Other Works. Retrieved August 1, 2022.
- ^ Holtz-Eakin, Douglas (May 6, 2015). "The Growth Consequences of Dodd-Frank". American Action Forum. Retrieved August 1, 2022.
- ^ Webster, John (May 23, 2018). "How Dodd-Frank Hurts the Little Guy". RealClearPolicy. Retrieved August 1, 2022.
- ^ Puzzanghera, Jim (June 8, 2017). "House votes along party lines to repeal key Dodd-Frank financial reforms". Los Angeles Times. Archived from the original on June 8, 2017. Retrieved July 23, 2021.
- ^ Tracy, Ryan; Ackerman, Andrew (May 24, 2018). "Trump Signs Banking Bill, Adding to Regulators' To-Do List". The Wall Street Journal. Retrieved December 3, 2022.
- ^ Pramuk, Jacob (May 24, 2018). "Trump signs the biggest rollback of bank rules since the financial crisis". CNBC. Retrieved July 23, 2021.