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Dodd Frank Act Essay

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Analysis of the Dodd-Frank Act. University of California, Riverside BUS 102 Law and Ethics Kishan Patel Section 22. Table of Contents Introduction 2 History of the Act 2 Why was it necessary 3 Market or Government Failure 3 Implementation 5 Impact on Business and Society 6 Policy Analysis 8 Did it work? 9 Strengths and Weaknesses 10 Recommendations for Future Policymakers 11 Appendix 13 Reference Page 14. Introduction In 2010, the United States was weaping with the aftermath of the 2007-2008 financial crisis, which lead to the Dodd-Frank Wall Street Reform and Consumer Protection Act. This Act acted as a direct law that aimed to oversee the financial regulatory system in the country and was a direct initiative to the collapse …show more content…

To begin with, key figures such as Senator Christopher Dodd and Representative Barney Frank, led various efforts in crafting and supporting the Act. Senator Christopher Dodd was the chair of the Senate Committee on Banking, Housing, and Urban Affairs, and Representative Barney Frank was the chair of the House Financial Services Committee. Together, both of these key figures supported a political environment to advance this bill. There were extensive hearings and negotiations among the policymakers and advocacy groups that addressed the systemic issues; strengthening the support, for the Dodd-Frank Act, and leading to its introduction in the House and the Senate in late 2009. After this initial introduction, it was signed by President Barack Obama on July 15, 2010, and was seen as a firm commitment to enhance financial stability and protect consumers in a financial …show more content…

The Dodd-Frank Act led to the creation of the Consumer Financial Protection Bureau, which is set to protect consumers from financial misconduct. Although this Act seems like an aid, some say that these sorts of agencies can lure the industries, and can lead to creating regulatory policies that are in favor of the industry and markets, not the consumers. To add on, another theory is that institutions may join in with greater risks when they aren’t held up to the consequences of their actions. To counter this, the Dodd-Frank Act designated to overlook certain financial institutions that are “systematically important” and hence get more enhanced regulations overlooking them, as a way to prevent any other occurrences or high-level risk investments that can fail. You can argue that the regulations could push for more risky behavior from the institutions as it can act like a safety net that can rebounce the failures with the help of the

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The relegation of the banking and housing markets became a more efficient resolution from overseers of the economic crisis of 2008 like Secretary of the Treasury Henry Paulson. The Democrats during the economic crisis saw the relegation of the banks through government agencies as vital to fixing the economic crisis. The Democrats showed their viewpoint on the solution with The Dodd-Frank Act. The Dodd-Frank Wall Street Reform and Consumer Protection Act was co-authored by Barney Frank and Christopher Dodd. Barney Frank was from Massachusetts and served in the House of Representatives since 1981 until 2013.

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