To prevent another financial collapse, the Obama administration proposed and worked to pass the most comprehensive reform of the financial sector since the 1930s. The Dodd-Frank law is a major win for workers and the middle class over Wall Street greed and irresponsible risk taking. The new law:
- Creates a strong and independent consumer protection agency to protect working people from predatory lenders. When the Republicans threatened to undercut the agency by blocking President Obama’s nominee for director, he overcame their stalling tactics by using his recess authority to appoint Ohio Attorney General and consumer watchdog Richard Cordray to run the Consumer Financial Protection Bureau (CFPB).
- Regulates the “shadow” derivatives market, hedge funds and private equity funds.
- Gives long-term investors new tools to hold corporate boards and senior management accountable.
- Helps prevent future bank bailouts by creating a council of regulators to oversee systemic risk, giving regulators authority to dissolve financial institutions while prohibiting bailouts for bank shareholders and executives.
- Limits banks’ authority to make risky bets backed by taxpayer funds.
Read more in Corporate Watch.