Five Years In, Congress’ Financial Reform Law Is Doing Important Work
Congress’s financial reform law turns five today. Dodd-Frank, the massive package of Wall Street reforms passed in the wake of the Great Recession, is massively underrated. The package overhauled the financial sector with the goals of tightening up enforcement and increasing consumer protections.
One major component of the law was the establishment of the Consumer Financial Protection Bureau, or CFPB—the only financial regulator dedicated to protecting consumers. In its four years of existence, the CFPB has helped return more than $10.1 billion to more than 17 million consumers in addition to protecting Americans from predatory lenders and deceptive mortgage practices.
Despite this extraordinary success at keeping Wall Street responsible and protecting hard working Americans, the law continues to be under attack. In fact, even though Dodd-Frank isn’t even fully in place yet, Congress has tried 139 times to either amend or repeal parts of the law. And the financial industry has spent $3.25 billion to influence the government in the five years since the law was passed. That means that if financial industry spending in the last five years were a country, it would be the 158th largest economy—bigger than 30 developing nations.
The powerful lobby against the rule has been successful in hamstringing the full implementation of the law. As a part of the package, many regulatory agencies were tasked with creating separate rules and because of the excessive lobbying and infighting, there are still 83 separate rules that haven’t been written yet. Included in the unfinished laws, are important rules like mandating disclosure of CEO-to-worker pay ratios and strengthening the controversial “Volcker Rule.”
BOTTOM LINE: We have Dodd-Frank to thank for the common sense reforms that have helped keep Wall Street accountable and level the playing field between consumers and the financial industry. But despite Dodd-Frank’s success, powerful lobby groups and conservative lawmakers have continued to thwart the law’s implementation.
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