Financial Reform

The Wall Street Reform and Consumer Protection Act was signed into law on July 21, 2010.

This bill puts an end to bailouts for big banks, establishes tough consumer protections, and most importantly, puts into place strict rules against risky financial practices that will hold Wall Street more accountable. Never again will taxpayers be held hostage by large institutions that make bad decisions jeopardizing the entire United States economy.

Common-sense reforms that hold Wall Street and the Big Banks accountable will:

  • Rein in Big Banks and their big bonuses
  • End bailouts and the idea of “too big to fail” by ensuring taxpayers are never again on the hook for Wall Street’s risky decisions
  • Protect families’ retirement funds, college savings, homes and businesses’ financial futures from unnecessary risk by CEOs, lenders, and speculators
  • Protect consumers from predatory lending abuses, fine print, and industry gimmicks
  • Create a consumer financial protection bureau to protect and empower consumers to make the best decisions on homes, credit cards, and their own financial future
  • Inject transparency and accountability into a financial system run amok


Specifically, the legislation:

-Creates a new Consumer Financial Protection Bureau to protect families and small businesses by ensuring that bank loans, mortgages, and credit cards are fair, affordable, understandable, and transparent. We currently have rules that keep companies from selling us toasters that burn down our homes. We should have similar rules that bar the financial industry from offering mortgage loans to people who can’t afford repayment.

-Ends predatory lending practices that occurred during the subprime lending frenzy.

-Shuts down “too big to fail” financial firms before risky and irresponsible behavior threatens to bring down the entire economy.

-Ends costly taxpayer bailouts with new procedures to unwind failing companies that pose the greatest risk – paid for by the financial industry and not the taxpayers.

-Creates tough new rules on the riskiest financial practices that gambled with your money and caused the financial crash, like the credit default swaps that devastated AIG, and common sense regulation of derivatives and other complex financial products.

-Establishes tough enforcement and oversight with:

  • More enforcement power and funding for the Securities and Exchange Commission, including requiring registration of hedge funds and private equity funds
  • Enhanced oversight and transparency for credit rating agencies, whose seal of approval gave way to excessively risky practices that led to a financial collapse

-Reins in excessive executive compensation and retirement plans by allowing a ‘say on pay’ for shareholders, requiring independent directors on compensation committees, and limiting bank executive risky pay practices that jeopardize banks’ safety and soundness.

-Provides new protections for grocers, retailers and other small businesses facing out-of-control swipe fees that banks and other credit and debit card issuers charge these businesses for debit or prepaid-card purchases. As a result, merchants stand to save billions.

-Audits the Federal Reserve's emergency lending programs from the financial crisis and limits the Fed's emergency lending authority.


For information on the progess of implementation, please visit the U.S. Department of Treasury website here.