Financial Reform and Regulation - Obama Presidency Oral History

Despite these efforts, there was widespread consensus that much broader regulation and reform were required to prevent future crises. Comprehensive reform would require legislation, and the administration began to negotiate with key congressional leaders about whether the White House or Congress would play the lead role in the policy development process. Unlike in the processes that produced the Recovery Act or the Affordable Care Act, the White House elected to lead the effort, and released detailed proposals for Congress to take up. In their oral histories, economic and political advisers from the White House and executive branch agencies discuss these strategic issues, and speak widely about the development of the white papers that the Treasury released in February and June 2009, which became the blueprints for legislation.

Key players on Capitol Hill included Chair of the House Financial Services Committee Barney Frank and Chair of the Senate Banking Committee Christopher Dodd. In their oral histories, Frank, Dodd, and narrators from the White House and across the executive branch provide details about the long and fraught negotiations that culminated in the Dodd-Frank Wall Street Reform and Consumer Protection Act, the landmark reform legislation that Obama signed in July 2010. 

Dodd-Frank was a sprawling piece of legislation, and included a wide range of measures that responded to the varied diagnoses of the causes of the crisis and the problems embodied in the government’s response. To avoid future public bailouts of banks that had grown “too big to fail” without serious systemic consequences, Dodd-Frank created a new orderly liquidation authority to wind down troubled banks; it consolidated regulatory authorities under a new Financial Stability Oversight Board tasked with monitoring not just the health of individual banks, but the “systemic risks” facing the financial system writ large; it restricted commercial banks’ capacity to trade with customer deposits (the so-called Volcker rule, after former Fed chair Paul Volcker); limited the leverage that banks could take on; and created a new Consumer Financial Protection Bureau (CFPB) to crack-down on predatory lending practices that targeted marginalized Americans. In their interviews, economists, advisors, and regulators explain these policies, and recount the debates that surrounded them. 

After Obama signed Dodd-Frank, the administration turned its attention to implementing the bill, which required regulatory agencies and offices to write and issue new rules and regulations. Narrators also recount the difficulties associated with standing-up the CFPB as a new independent agency, and speak widely about congressional Republicans’ opposition to the agency, its distinct culture and relations with other regulators, and its ability to foster direct connections with Americans across the country. 

Just as the response to the 2008 crisis required coordination between the Fed and central banks around the world, the administration recognized that regulating twenty-first century finance required global standards, rules, and powers. In their interviews, narrators discuss the international negotiations that led to the announcement of the third Basel Accord in November 2010, which set new international standards for bank capital requirements, leverage, and liquidity.

While these efforts transformed the relationship between government and the financial industry, the continued prominence and profitability of global finance after the crisis sparked widespread anger, and encouraged political realignments. Narrators from across the project archive speak widely about the political consequences of the crisis, provide details about the administration's inability to launch criminal prosecutions of financial actors, and reflect on the rise of movements including Occupy Wall Street, the Tea Party, and the Fed Up campaign.

Financial reform and regulation overlaps and intersects with a number of other topic areas in the Obama Presidency Oral History collection, including Financial Crisis and the Economy and Republican Opposition.