Dodd-Frank's Abusive Standard: A Call for Certainty

Abstract

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (hereinafter, “Dodd-Frank” or the “Act”) promises to radically transform the U.S. financial services industry. The Act was based on five objectives for financial regulatory reform articulated by the Obama Administration in a June 2009 white paper: 1) promote supervision and regulation of financial firms; 2) establish comprehensive supervision of financial markets; 3) protect consumers and investors from financial abuse; 4) provide the government with the tools it needs to manage financial crises; and 5) raise international regulatory standards and improve international cooperation. Given the scale of transformation involved, Dodd-Frank is the most significant financial services reform legislation since the Federal Deposit Insurance Act, the Glass-Steagall Act, and federal securities laws of the 1930s. For banks and others in the financial services industry who deal primarily with consumers, the most radical change resulting from the Act is the establishment of a new agency, the Bureau of Consumer Financial Protection (hereinafter, the “Bureau”), solely