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Dodd-Frank Wall Street Reform and Consumer Protection Act

Wall Street Reform & Consumer Protection

For eight years, President Bush and his Republican allies ignored growing risks in the financial markets as Wall Street and big banks exploited loopholes and harmed America's families and small businesses. Their failure to regulate financial markets and control these risks left Wall Street and the big banks to gamble with our money, which compromised our future, our savings, and the American Dream. We know what happened: the worst financial crisis since the Great Depression -- we lost 8 million jobs and $17 trillion in retirement savings and Americans' net worth. Wall Street reform is the next critical step to create jobs and grow the economy.  As we rebuild our economy, we must put in place common-sense rules to ensure big banks and Wall Street can't jeopardize our recovery and hurt hard-working families and small businesses once again.  Wall Street may be bouncing back, but we know from experience that left to their own devices they're not going to police themselves.

This Congress and President Obama have made tough choices and taken effective steps to bring our economy back from the brink of disaster. The Recovery Act has already saved or created up to 2.8 million jobs and much of the TARP has been paid back. On December 11th, the House passed the Wall Street Reform and Consumer Protection Act (HR 4173) and on June 30th, the House passed the Dodd-Frank Conference Report of the Wall Street Reform and Consumer Protection Act by a vote of 237-192.  On July 15th, the Senate passed the bill by a vote of 60-39, which President Obama signed into law on July 21st.
 
These common-sense reforms hold Wall Street and the Big Banks accountable by:

  • Ending bailouts by ensuring taxpayers are never again on the hook for Wall Street's risky decisions
  • Protecting families' retirement funds, college savings, homes and businesses' financial futures from unnecessary risk by CEOs, lenders, and  speculators
  • Protecting consumers from predatory lending abuses, fine print, and industry gimmicks
  • Injecting transparency and accountability into a financial system run amok
  • Empowering consumers to make the best decisions on homes, credit cards, and their own financial future with a consumer financial protection agency

Learn more about what wall street reform means for you:

Watch Speaker's Pelosi's floor statement»

Read more about our work on financial reform on our blog, The Gavel»

The Top 10 Things You May Not Know About the Wall Street Reform and Consumer Protection Act»

Read the Dodd-Frank Wall Street Reform and Consumer Protection Act (Thomas)»

Download the Dodd-Frank Wall Street Reform and Consumer Protection Act (.pdf)»

PayGo Provisions: How Dodd-Frank Reduces the Deficit»

Read a summary from the Financial Services Committee» 

Summary:

  • Creating a new Consumer Financial Protection Agency to protect families and small businesses by ensuring that bank loans, mortgages, and credit cards are fair, affordable, understandable, and transparent.  We currently have rules that keep companies from selling us toasters that burn down our homes.  We should have similar rules that bar the financial industry from offering mortgage loans to people who can't afford repayment.
  • Ending predatory lending practices that occurred during the subprime lending frenzy.
  • Shutting down “too big to fail” financial firms before risky and irresponsible behavior threatens to bring down the entire economy.
  • Ending costly taxpayer bailouts with new procedures to unwind failing companies that pose the greatest risk - paid for by the financial industry and not the taxpayers.  Also eliminates the TARP as of July 1.
  • Tough new rules on the riskiest financial practices that gambled with your money and caused the financial crash, like the credit default swaps that devastated AIG, and common sense regulation of derivatives and other complex financial products.  Includes a strong “Volcker rule” that generally restricts large financial firms with commercial banking operations from trading in speculative investments.
  • Tough enforcement and oversight with:
    • More enforcement power and funding for the Securities and Exchange Commission, including requiring registration of hedge funds and private equity funds
    • Enhanced oversight and transparency for credit rating agencies, whose seal of approval gave way to excessively risky practices that led to a financial collapse
  • Reining in egregious executive compensation and retirement plans by allowing a ‘say on pay' for shareholders, requiring independent directors on compensation committees, and limiting bank executive risky pay practices that jeopardize banks' safety and soundness.
  • New protections for grocers, retailers and other small businesses facing out-of-control swipe fees that banks and other credit and debit card issuers charge these businesses for debit or prepaid-card purchases.  As a result, merchants stand to save billions.
  • Audits the Federal Reserve's emergency lending programs from the financial crisis and limits the Fed's emergency lending authority.