Analysis Of The Dodd Frank Wall Street Reform And Consumer Protection Act

844 WordsJul 24, 20164 Pages
The Consumer Financial Protection Bureau (CFPB) came about as a result of the Dodd–Frank Wall Street Reform and Consumer Protection Act. CFPB merged many responsibilities of several federal agencies to their central regulatory body. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was put in place to help promote financial stability for American borrowers and impose accountability and regulation of financial institutions. In 2007, interest rates went up and the value of homes stopped increasing at the extremely fast rate that they had in the past number of previous years, which caused many people to become behind on their mortgages or be foreclosed on. While interest rates were low and the value of homes was increasing drastically, many people decided to get second mortgages. One of the social issues that the Consumer Financial Protection Bureau policy is trying to address is regulating mortgage lenders. According to Slack (2012), “The Bureau is tasked with making sure people understand the fine print that explains the risks involved in using these services, and ensuring the banks, credit unions, and other financial companies that provide them play by the rules”. There are not many people that really read and understand all parts of their mortgage paperwork. Part of the goal of the CFPB was to make the mortgage process and loan stipulations easier to understand. A possible hidden agenda could be the government trying to avoid another financial crisis

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