Today, a group of Senate Republicans introduced legislation to repeal the Dodd-Frank Wall Street Reform and Consumer Protection Act. They did not suggest changes to the legislation or put forward any ideas to strengthen our financial system, protect consumers or increase responsibility on Wall Street. Their bold proposal is simply to do away with it and, instead, revert back to a system that brought our nation to the brink of complete financial meltdown.
Maybe these legislators have forgotten, but just a few years ago, the United States went through the most significant financial crisis since the Great Depression. Thousands of American businesses collapsed. Millions of jobs were lost. Trillions of dollars in household wealth and retirement savings were swept away. Our nation’s economy was brought to its knees.
This happened because oversight of our financial system was inadequate. Financial firms were taking on risks they did not fully understand. Federal regulators did not sufficiently use their authority to protect consumers and limit excessive risk. Subprime lenders used predatory practices in order to trick people into loans they didn’t understand and, for some, ultimately couldn’t pay. Policy makers were too slow to fix a broken system. And loopholes in the law and gaps in regulation allowed large parts of the financial industry to operate without oversight, transparency, or restraint.
We were in desperate need of a stronger, more resilient financial system. We worked across government, with substantial input from the outside, to craft that better system. Congress passed, and the President enacted, that better system in the Dodd-Frank Wall Street Reform and Consumer Protection Act. And we are working quickly, carefully, and responsibly to implement these necessary reforms.
The stakes for our success couldn’t be higher for businesses, families, and the economic future of our nation.
Steve Adamske is Deputy Assistant Secretary of the Treasury for Public Affairs.