In the fall of 2008, the United States slid into a recession that affected many other countries across the globe. This led to massive amounts of taxpayer money given to corporations as bailouts, and as this failed, people began to call for reform. This came in the form of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was passed in July of 2010.
The Dodd-Frank Act was constructed by Representative Barney Frank and Senator Chris Dodd in order to increase the transparency and financial accountability of banks and corporations. There are many provisions of the Act, which serve to protect American taxpayers, end bailouts, increase oversight, and end the “too big to fail” attitude towards large corporations. To further these goals, the Dodd-Frank Act includes provisions such as:
- Creating the Financial Stability Oversight Council and Office of Financial Research to supervise the Federal Reserve holdings and keep an eye on the economy
- Regulating the liquidation of financial institutions
- Streamlining bank regulation, which includes abolishing the Office of Thrift Supervision
- Increasing the reporting requirements for investment advisers, and changing the definition of an accredited investor
- Establishing the Federal Insurance Office to oversee insurance companies and monitor the treatment of consumers
- Limiting proprietary trading for banks
- Regulating and controlling derivatives trading and “security-based swaps”
- Allowing the Federal Reserve to monitor payments, clearing, and settlement of financial market utilities
- Protecting investors by realigning the Securities and Exchange Commission
- Establishing the Bureau of Consumer Financial Protection
- Changing the New York Federal Reserve President to a Presidential appointment
- Encouraging low-income people to invest, get loans, open bank accounts, etc.
- Eliminating bailouts from taxpayer money
- Regulating mortgage lending
Additionally, the Dodd-Frank Act encourages whistleblowers to bring forth any information that they have regarding financial fraud. If this information leads to a successful case, you may be entitled to a portion of the damages awarded. To protect yourself and your fellow citizens, you should not allow financial fraud to go unpunished.