Protecting Consumers and Wall Street Reform

As a member of the House Committee on Financial Services, I worked with my colleagues to address the causes of the 2008 recession, to stop future bailouts of Wall Street, and to prevent another economic collapse by enacting the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).  Dodd-Frank makes important changes to federal law to promote financial stability by improving accountability and transparency in the financial system, to end “too big to fail,” and to protect consumers from abusive practices.

Specifically, Dodd-Frank created the Consumer Financial Protection Bureau (CFPB), which protects Americans from unfair and abusive financial products and services.  As we learned from the credit crisis, deceptive financial products – like predatory mortgages and hidden credit card fees – hit everyday Americans’ pocketbooks and can also destabilize the entire economy.  The bill also makes critical improvements to the derivatives markets, which played a central role in the financial collapse, by requiring more transparency in trading and pricing and by requiring them to be cleared.  Dodd-Frank also requires systemically important financial companies to create a “living will,” or plan to wind them down in the event that they collapse, and also provides the FDIC with authority in certain instances to orderly liquidate financial institutions to end the need for Wall Street bailouts in the future. Dodd-Frank further protects taxpayers by providing important protections for municipal governments when they issue bonds.

Many of the Dodd-Frank reforms are already working. Among the reforms that are making a difference today are that enhanced powers granted to the Commodities Futures Trading Commission uncovered and led to a settlement in the LIBOR scandal. The CFPB recently concluded its first action that resulted in a $140 million restitution settlement to consumer victims of deceptive credit card practices.  The derivatives market is reforming and becoming more transparent. 

However, the work continues to ensure the long-term prosperity of the United States by creating a smart, responsive, and robust regulatory environment that both protects consumers and encourages financial innovation and risk taking.



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    repName John Smith  
    helpWithFedAgencyAddress Haverhill District Office
    1234 S. Courthouse
    Haverhill, CA 35602
    district 21st District of California  
    academyUSCitizenDate July 1, 2012  
    academyAgeDate July 1, 2012  
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