The Dodd-Frank Wall Street Reform and Consumer Protection Act, passed on July 21, 2010, is the key financial reform law passed in response to the 2007-2008 financial crisis. The act includes a variety of reforms designed to increase transparency of financial institutions, prevent more instances of “too-big-to-fail” bailouts, and protect American consumers from banks’ taking exorbitant risk and engaging in other harmful activities.
What’s the significance?
After the financial crisis of 2007-2008 and amid the ensuing Great Recession, the newly elected Obama administration decided that major financial regulation overhaul was necessary to reform a broken system. The Dodd-Frank Act represents reforms of the financial system of a scale comparable to those of the New Deal’s response to the Great Depression. The hope is that the act will prevent another such devastating global financial crisis and recession.
Who’s talking about it?
David Rilly writes in the Wall Street Journal that even with good intentions, the complicated and multi-layered reforms of Dodd-Frank may make banking regulations difficult to enforce and guard against loopholes…Roosevelt Institute Fellow Mike Konczal reflects that the commotion around the JPMorgan losses reveal the necessity of stronger enforcement of Dodd-Frank regulations…Edward Wyatt notes that Republicans try to tear down Obama by claiming that the Dodd-Frank Act has hurt the economy rather than helping it… Erik Wasson at The Hill reports on the House’s cutting Dodd-Frank funding.