Dodd Frank Consumer Protection Act

In 2010 President Obama passed a consumer protection act formally titled the “Dodd-Frank Wall Street Reform and Consumer Protection Act.” This act was passed after the 2008 financial crisis to try to “promote the financial stability of the United States by improving accountability and transparency in the financial system,” and to put an end to ‘‘too big to fail’’ banks. Although the act was built on good intentions, Dodd-Frank has accomplished little of its intended purposes, and has only followed through in ways damaging to consumers. One of Dodd-Franks primary goals was to regulate “too big to fail” banks such as J.P. Morgan, Goldman Sachs, Citibank, and Morgan Stanley, in order to prevent further recessions at the hands of the financial industry. Unfortunately, this meant the act paved the way to future bail-outs, instead of preventing them. Dodd-Frank seeks only to regulate, and its only provision to ensure cooperation is a financial reward for whistleblowers. This incentive is not enough to outweigh the costs for most industry insiders, so the government ends up giving bailouts anyways
Small banks can ill-afford those kinds of costs, and additionally, Dodd-Frank’s other new requirements have caused undue cost to these smaller banks. Many small banks can no longer afford to offer free checking accounts, and due to stiff regulations they have been forced to end programs such as those that offer mortgages or car loans. Even though the legislators of Dodd-Frank intended to target large banks, most of the regulatory barriers hit small banks the hardest, forcing them out of them business. Because of that, Dodd-Frank has almost had the opposite of its intended purpose. Instead of ending the “too big to fail banks” it has only made them larger, in part by creating too many barriers for entry and shutting out