By Tatyana Hopkins
The financial reforms provided by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 have helped prevent a financial crisis in the face of the global COVID-19 pandemic, said former President Barack Obama.
“Our reforms worked, providing a sturdier foundation to help our financial system weather a future crisis,” he said. “They’re still blocking taxpayer bailouts; they’re still protecting consumers and investors; and, even with a pandemic that has added a historic level of joblessness, so far, these reforms have helped prevent the [public health] crisis from spiraling into a financial crisis too.”
Mr. Obama spoke Tuesday about attempts by “well-funded opposition” to block Dodd-Frank’s broad financial regulations reforms, the law’s impact on recovery from the Great Recession and its continued work to prevent “recklessness on Wall Street from devastating folks on Main Street” during a conference in celebration of the legislation’s 10th anniversary.
The Dodd-Frank Act provided an advanced warning system on the stability of the financial sector and created new rules on executive compensation and corporate governance. It also reorganized regulatory agencies and created new ones such as the Consumer Financial Protection Bureau (CFPB), which protects consumers against abusive financial products and services.
Mr. Obama said while the core of Wall Street reform remains intact, there have been recent challenges to the law.
“In the years since I left office, the same forces that opposed us back then have been doing their best to undermine the law,” Mr. Obama said. “We cannot afford to go back to the days of unchecked recklessness and irresponsibility on Wall Street.”
The virtual conference featured a keynote discussion with the bill’s namesakes and key architects, former Sen. Chris Dodd (D-Conn.) and former Rep. Barney Frank (D-Mass.), moderated by NBC News Senior Business Correspondent Stephanie Ruhle.
GW Law’s Business and Finance Law Program organized the event with Better Markets.
Christopher A. Bracey, GW Law interim dean, vice provost for faculty affairs and professor of law, and Dennis Kelleher, Better Markets co-founder, president and CEO gave introductory remarks.
Mr. Dodd and Mr. Frank both echoed Mr. Obama’s sentiments that their bill has helped avoid economic collapse in the face of the pandemic and that its protections continue to remain strong despite modifications.
"I'm disappointed by some of the decisions, but I want to remind people in this conference—we're not going anywhere," Mr. Dodd said. "The heart of what we did 10 years ago is the law of the land today in the United States."
The event also included remarks from other financial reform participants including Sheila Bair, former Federal Deposit Insurance Corporation chair; John Reed, former Citibank/Citigroup CEO; Sarah Bloom Raskin, former Federal Reserve System governor and former U.S. Deputy Treasury Secretary; Rep. Maxine Waters (D-Calif.); and a closing keynote speech by Sen. Elizabeth Warren (D-Mass.).
Ms. Waters, who chairs the House Financial Services Committee, said over the years dozens of bills seeking to undercut Dodd-Frank have been introduced, including the Wrong Choice Act, which would have repealed key aspects of Dodd-Frank such as the CFPB and prevention of future taxpayer bailouts.
“President Trump promised to do ‘a big number’ on Dodd-Frank in his first few days in office,” she said, “and I’m proud to say that that hasn’t happened on my watch.”
She said not only has she protected the bill, but she has advanced its aims through investigations and reports on Trump-era consumer protection rollbacks in payday lending, creating further reforms to the consumer credit reporting system and addressing lack of diversity and inclusion in the financial industry.
Ms. Warren, who was instrumental in developing some key elements of Dodd-Frank, including the creation of CFPB, said the legislation’s passing was a critical moment for both the country’s economy and democracy because it provided a roadmap for big structural change for a financial system that built their business models to “cheat” American consumers.
“It was a real David versus Goliath moment,” she said. “Even when the banks spent hundreds of millions of lobbying dollars [to fight the bill], we won. For once, American families beat back the big banks.”
She defended the CFPB, noting that the agency has helped more than 26 million Americans get back more than $12 billion from harmful financial products.
Ms. Warren warned that the fight was not over.
"Dodd-Frank and the CFPB … [show] that government can be a powerful force for good,” she said.