Today in 2010: Dodd-Frank is signed into law

July 21, 2016

Today in Legal HistoryIt’s been almost a decade since the financial crisis that incited the Great Recession.  Although some elements of the economy were forever altered by the downturn, the economy has, by and large, recovered.

But the economy isn’t the only system that changed because of the Great Recession; as anyone familiar with the area would tell you, the financial regulatory landscape was also transformed in the Great Recession’s wake – most significantly by the passage of one law: the Wall Street Reform and Consumer Protection Act – more commonly referred to as the Dodd-Frank Act.  The act was signed into law by President Barack Obama on July 21, 2010.

As luck would have it, we actually have a post from that very day about Dodd-Frank’s enactment (which you can read here), documenting that the law was signed at 11:30 a.m. on that morning six years ago.

At over 2000 pages, the expansive law affects a variety of regulatory topics.  What’s more, even though the law was passed six years ago, its implementation is still ongoing.   For example, according to a recent study by Davis Polk, only 70% of Dodd-Frank’s 390 total rulemaking requirements have been fulfilled through finalized rules.

But even those rules that have been finalized have already made a significant impact, such that there is sufficient space within the confines of this article to mention all of the changes.  Some of the more notable provisions, though, include the whistleblower bounty rule (which provides monetary rewards to those who provide actionable information on company wrongdoing) and the Durbin Amendment (which caps debit fees charged by exchange companies to retailers).

Dodd-Frank is also responsible for the creation of a new federal agency, the Consumer Finance Protection Bureau (CFPB), which is already making its presence felt just a few years after its creation.  The bureau may prescribe rules “identifying as unlawful unfair, deceptive, or abusive acts or practices in connection with any transaction with a consumer for a consumer financial product or service, or the offering of a consumer financial product or service.”

Among its initiatives, the CFPB is looking to ban class-action waivers in certain consumer contracts and more strictly regulate payday and other short-term loans.  The CFPB website itself also offers a portal page for consumers to make complaints about financial products or services.  Since its inception five years ago, the bureau has received over 930,000 consumer complaints, with more being submitted every year.

Despite the broad impact of these few provisions, Dodd-Frank contains many more, and as stated earlier, its impact continues to be felt even today.  It’s undoubtedly one of the most significant regulatory laws enacted in the past several decades.