Dodd-Frank Act Turns Ten
Last week, on the 10th anniversary of the Dodd-Frank Act being signed into law, its major supporters praised its survival despite years of opposition. The legislation’s authors, former Senator Chris Dodd (D-Conn.) and former Representative Barney Frank (D-Mass.), along with former President Barack Obama, who signed the legislation, spoke at a virtual event about the law’s impact over the past decade.
“In the years since I left office, the same forces that opposed us back then have been doing their best to undermine the law,” said former President Obama, according to American Banker. “Our reforms are still promoting financial stability. They are still blocking taxpayer bailouts. They are still protecting consumers and investors.”
Signed into law on July 21, 2010, the Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) and authorized the Federal Reserve to supervise large banks. It also established the Financial Stability Oversight Council to find systemic risks and identify nonbanks for Fed oversight, among other impacts.
In the past decade, the law has undergone some minor changes. Congress passed bipartisan legislation in 2018 to release smaller institutions from many of the regulations. More recently, the Supreme Court eliminated a provision that restricted the president’s ability to fire a CFPB director, but these minor changes have not largely altered the core reforms of the Dodd-Frank Act.
Key supporters of the law agreed that the legislation has supplied the financial system with the strength necessary to uphold the American economy during the COVID-19 pandemic.
“If we had the complication of a financial system that could not respond, as well as the pandemic and all of the economic implications of that, we’d be in such a deep hole and I worry if we could get out of it,” Dodd stated. “The strength of our financial institutions has made an incredible difference.”