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Kim Butler

Partners for Prosperity, Inc.

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I have 20+ years of handling alternative investments in cash, growth and income for clients nationwide.  I strive to help my clients with all things financial in every way possible over the phone and the web.  I own an alpaca farm which I enjoy working during my downtime.  I also enjoy gardening, writing and reading books.  I also train other advisors on Prosperity Economics.

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Happy(?) 5th Anniversary, Dodd-Frank

On its fifth anniversary, Dodd-Frank has not yet been fully implemented. Many of the bill’s non-mandatory provisions have not been adopted, 

| BY Donald Liebenson

To its proponents, the Dodd-Frank Wall Street Reform and Consumer Protection Act, signed into law by President Barack Obama five years ago last week, has made America’s financial system “safer and stronger, and our economy…in a far better position to continue growing and creating jobs.” (a U.S. Treasury statement). To its critics, such as Sen. Tom Cotton (R-Arkansas) Dodd-Frank has done “much more harm than good” for families in his state “finding it more difficult to buy their first home, get a loan for a new tractor, or even open a simple bank account. And our community banks are struggling to keep their doors open as they deal with more bureaucracy and regulations.”

The Dodd-Frank Wall Street Reform and Consumer Protection Act was created following the 2008 economic collapse, the country’s worst financial crisis since the Great Depression. Nearly nine million Americans lost their jobs and more than five million their homes, according to the Treasury Department. Nearly $13 trillion of household wealth was wiped out. In 2009, when Obama took office, the economy was losing more than 750,000 jobs a month, while Americans’ confidence in the country’s financial system plummeted to historic lows.

Dodd-Frank is a set of financial reforms that created new oversight and established new rules for banks. It created the Office of Financial Research to improve transparency of executive pay pracdtices and hedge fund and private equity activites, and the Consumer Financial Protection Bureau, which is charged to protect consumers from predatory practices in consumer financial products and services. Last week, the CFPB ordered Citibank to pay $700 million in relief to eligible consumers impacted by illegal practices related to credit card add-on products and services, including alleged misrepresentation of coverage costs and fees as well as the benefits of products. Roughly seven million consumer accounts were affected , the agency reported.  

The White House marked last week’s anniversary with a “by the numbers” Dodd-Frank scorecard. Among them: 

·         $141 billion has been paid by 14 of the biggest banks for mortgage-related violations in the lead-up to the 2008 crisis.

·         $11 billion in relief has been provided by the CFPB to more than 26 million consumers harmed by financial institutions 

·         Banks have added more than $600 billion of additional capital

Here’s another number: 139. That’s how many separate times Congress has tried to amend or repeal Wall Street reform, according to Davis Polk & Wardel LLP. Five of these pieces of legislation have been signed by President Obama. Further, financial industry spending since Dodd-Frank to influence lawmakers have spent $3.25 billion, according to Americans for Financial Reform. This tops the economy of some 30 small developing countries, including Liberia and Samoa.

On its fifth anniversary, Dodd-Frank has not yet been fully implemented. Many of the bill’s non-mandatory provisions have not been adopted,  The Volcker rule, one of Dodd-Frank’s most divisive provisions, takes full effect Tuesday. It prevents banks that take government-issued deposits from making speculative investments such as those the precipitated the collapse.

While some, like Texas Rep. Jeb Hensarling called for this to be Dodd-Frank’s “last anniversary,” it supporters weigh in against the party poopers. “As we mark this anniversary,” declared Nancy Pelosi in a statement, “let us rededicate ourselves to building an economy that works for all Americans.”

About the Author

Donald Liebenson


Donald Liebenson writes news and features for Millionaire Corner. He has been published in the Chicago Tribune, The Chicago Sun-Times, The Los Angeles Times, Fiscal Times, Entertainment Weekly, Huffington Post, and other outlets. He has also served as a marketing writer for Chicago-based Questar Entertainment and distributor Baker & Taylor.  

A graduate of the University of Southern California, he is married with a college-age son. He also writes extensively about entertainment.