This month marks the 10th anniversary of the signing of Dodd-Frank Wall Street Reform and Consumer Protection Act. This landmark legislation was in response to the 2008 financial crisis that became known as the Great Recession. The crisis peaked in September 2008 with the collapse of the fourth largest investment bank in the country, Lehmen Brothers. This led to the freezing of markets, destroyed personal retirement savings, and led to the foreclosing of homes and widespread homelessness. Over the last decade, Dodd-Frank and its programs have been praised as much as they have been criticized with legislative attempts to role back its reforms.

In a recent article in the American Banker, President Obama remarked, “in the years since I left office, the same forces that opposed us back then have been doing their best to undermine the law,” Obama said during the event hosted by Better Markets. “And while they’ve had some successes, the core of Wall Street reform remains intact. Our reforms are still promoting financial stability. They are still blocking taxpayer bailouts. They are still protecting consumers and investors.” Some of the reforms made to Dodd-Frank include the rolling back of the Volker Rule, easing market caps for smaller institutions and most recently a Supreme Court ruling that allows the President to fire the CFPB Director. The recent COVID-19 pandemic has arguably given Dodd-Frank its ultimate stress-test. When the markets began their decline in late March of this year, the banks stood up to the test because they had the liquidity to sustain the downturn. Without the stress-test programs in Dodd-Frank this could have been a more disastrous scenario for the economy. Former Senator Dodd remarked on this point when he stated, “If we had the complication of a financial system that could not respond, as well as the pandemic and all of the economic implications of that, we’d be in such a deep hole and I worry if we could get out of it,” Dodd said. “The strength of our financial institutions has made an incredible difference.”

Despite attempts to deregulate banks, Dodd-Frank remains the largest bulwark of our financial system since the signing of Glass-Steagall and although we cannot predict what economic circumstances will befall us in the future, we can predict that Dodd-Frank is here to stay and will keep protecting consumers far into the future.