Dodd Frank Act Research Paper

Throughout the years many initiatives were taken to help keep control of the economy for the United States. Past Presidents, with the acceptance of Congress, attempted to stimulate the economy through different proposed plans to help achieve this goal. Within the past decade the United States had the worst economic downturn since the Great Depression, with help from one of Franklin Roosevelt’s acts passed and a couple of other passed plans that will be discussed consists of the Glass-Steagall Act, Dodd-Frank Act, and the Volcker Rule. The financial crisis that occurred back in 2008 can be traced back Bill Clinton’s presidency when he signed the Gramm-Leach Bliley Financial Services Modernization Act of 1999 when this took away key factors

Dodd-Frank Act was “based on a set of beliefs about the causes and consequences of the housing boom and collapse that preceded the recession” (Johnston). This act ensured that mortgage terms are suitable for borrowers from lenders, imposing massive legal risks on any lender that decides to write mortgage contracts that do not meet up to “qualified” mortgages. In the early 2000s bankers and mortgage brokers used high-pressure sales tactics and even using fraud to sell

This rule was “designed to protect Americans against another financial crisis by barring depository banks from using their depositors’ money for short-term and speculative trading”. Criticism rose upon the finalization of this rule with forging officials fearing that the reduced liquidity of the market would negatively affect their banks. Canada argued that this rule went directly against the United States’ obligation under the North American Free Trade Agreement (Cappel). State officials and private investors sent thousands of letters to the agencies in charge of implementing this rule all over the globe in fear and concerns. The rule was not accepted by a variety of people, but the violation of NAFTA feared fellow countries involved, questioning rather or not this is the first step towards what could be a rebellious United States. In conclusion, to help control the economy of the United States many initiatives were taken. The Great Depression brought upon several reform and recovery acts, which involved the Glass-Steagall Act and within the past decade due to another financial crisis and to overcome this crisis the Dodd-Frank Act and the Volcker Rule were passed. These passed acts and rules succeeded in specific ways, such as the Dodd-Frank Act accomplished goals of reducing the “too big to fail” belief of major financial