The Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into United States federal law by US President Barack Obama on July 21, 2010.
Dodd-Frank Wall Street Reform and Consumer Protection Act
What the Dodd-Frank Wall Street Reform and Consumer Protection Act is
The Dodd-Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd Frank, was inserted to be a part of the Federal Law of the U.S in July 2010 by President Barack Obama. This reform was added as a reaction to the Great Recession that caused major changes in the economy of the nation, and all financial regulations imposed by the state. The Dodd-Frank Wall Street Reform and Consumer Protection Act is an outline of financial regulations, added to the Federal Law in 2010, in order to avoid the reoccurrence of the 2008 economic crisis in the U.S. These regulations directly impact the economic regulatory environment that affects all financial institutions of the country, such as banks and loan service agencies, and all people affiliated with these institutions, including their customers.
The United States of America faced the worst economic crisis ever to be seen in history. The nation was swept into a severe recession that also affected many other countries worldwide. This economic crisis caused huge amounts of taxpayer money being paid to large companies in the form of bailouts, which automatically failed to achieve their purpose. What happened as a result was that, people in America, and across other nations that faced similar conditions, started protesting for reforms that would safeguard their economic stability, and ensure that all their investments, and the money deposited in banks, was safe. This protest led to the passing of Dodd-Frank Wall Street Reform and Consumer Protection Act in July 2010 by President Barack Obama.
An overview of some of the provisions of the Dodd Frank
The Dodd Frank Act consisted of provisions which would ensure that a similar economic crisis does not occur in the future. These included:
- Regulation of the monetary liquidity of financial institutions
- Reforming the Securities and Exchange Commission to protect the security of investors
- Making reforms in the Monetary and Fiscal policies
- Ensuring that Proprietary Trading was only limited to banks
- Ensuring that insurance companies were monitored by the Federal Insurance Office
- Assigning the Federal Reserve to monitor all banking transactions