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Dodd-Frank and You

There is so much hanging in the air as we observe President-elect, Donald Trump, begin to assign cabinet members and discuss the potential execution of early campaign promises. One of those promises was to dismantle the Dodd-Frank Act, stating that the strict regulations were harming the economy. For those of you who aren’t into reading government legislation and Supreme Court decisions on a regular basis, here’s a brief explanation of why this should matter to you.

What is Dodd-Frank?

The Dodd-Frank Act, also known as the Wall Street Reform, was signed into law as a direct result of the financial crash of 2008 that left millions of Americans jobless and in debt. At the time of this financial crisis, the financial regulatory system had next to no oversight. Lenders were sliding in hidden fees and using obscure language to lock consumers into loans and mortgages that were bound from the beginning to become unpaid debt. The Dodd-Frank Act was put into place to provide much-needed oversight and regulations for the stability of our economy and to protect consumer rights.

The Pros and Cons

Critics have come down hard on the financial reform, calling it too complicated and strict. The Dodd-Frank is no doubt complicated. This was a sweeping reform meant to completely overhaul a broken financial system that was responsible for the loss of trillions of dollars and unemployed Americans. Of course, it’s complicated! And, too strict? Says who? Certainly, that’s not a cry you’re going to hear coming from the consumer side.

The Consumer Financial Protection Bureau (CFPB) was born out of the Dodd-Frank Act with the specific purpose to serve as a consumer watchdog in every capacity. In the five years since its inception the bureau has made a huge impact on consumer finance with the creation of new mortgage lending rules, regulation enforcement on abusive debt collectors and rendering a safe haven for consumers to not only file complaints but to access resources that are guaranteed to have their best interests at heart. I can say with certainty that the CFPB acts in the best interest of the consumer because here is the key thing: the bureau receives funding solely from the Federal Reserve and is operated by one single executive director. This means that the CFPB is truly the one and only consumer guardian that is without an ulterior political agenda. The initial design of the bureau was safeguarded to ensure that the mission could not, and would not be changed. Donald Trump and his designated cabinet members are looking to do just that by dismantling the single head of the department leadership system and implementing a five-member commission similar to that of the Federal Communications Commission (FCC). If this passes, you will see a great deal of political squabbles and strategic standstill amongst the appointed council and a whole lot less of any actual progress on behalf of consumer protection.

What Does The Future Hold?

The Supreme Court reached a decision in October 2016 that a single director who can only be removed for cause is unconstitutional. As a result of this decision, the single director, Richard Cordray, is currently employed at the will of the President. It is likely that President-Elect, Donald Trump, will choose to remove Cordray at the end of January and attempt to replace the single director agency with the above-mentioned organization structure.

Contact a Consumer Law Attorney

The fate of consumer protection is honestly unknown at this point. The suspense is like covering your eyes during the scariest part of a movie and then peeking between your fingers because you know that whatever happens next is going to be imperative to the story. Only, this isn’t a movie. This is real. And, this is happening. The best way to prepare for anything is to educate yourself. Contact an experienced consumer law attorney at Luftman, Heck & Associates to understand your consumer rights at (888) 726-3181 or email us at advice@ohiodebthelp.com.