10 Years After Dodd-Frank, Here’s What We Know

In 2010, Congress responded to years of turmoil in the financial services industry by enacting the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). This landmark legislation was intended to protect consumers, regulate and police Wall Street, restore economic stability, end “too-big-to-fail” institutions, and prevent another financial crisis.

July 2020 marked the tenth anniversary of Dodd-Frank. Despite several attempts to undercut the law over the past decade, its protections have benefited countless U.S. consumers, investors, taxpayers, and whistleblowers. Even now, Dodd-Frank has helped the nation avoid an economic collapse in the wake of the coronavirus pandemic.

Dodd-Frank: An Overview

During the Great Depression, President Franklin D. Roosevelt’s New Deal introduced an array of financial reforms along with job creation programs, infrastructure projects, and public works. In the decades since, however, many of those reforms have been crippled, repealed, or outright dismantled, particularly during the push for deregulation in the 1980s and 90s.

Dodd-Frank was the first significant regulatory legislation for the financial sector since the New Deal. It reorganized the oversight responsibilities of the financial regulatory system and created new agencies, including:

  • The Consumer Financial Protection Bureau (CFPB), which protects consumers from abuse related to credit cards, mortgages, and other financial products.
  • The Financial Stability Oversight Council, which promotes discipline in the market and responds to emerging risks to the nation’s financial system.
  • The Office of Financial Research, which identifies threats to the financial stability of the United States.

Additionally, Dodd-Frank gave the Federal Reserve Board additional authority to supervise and regulate banks and financial institutions, and restricted them from making certain kinds of speculative investments through the Volcker Rule and stress-tests administered by the Federal Reserve.

Dodd-Frank Whistleblower Protections

Dodd-Frank also strengthened and expanded the whistleblower provisions of the Sarbanes-Oxley Act (SOX), which prohibits employers from taking retaliatory action against employees in publicly-traded companies who report, among other things, corporate fraud or participate in an investigation of alleged corporate impropriety.

Under Dodd-Frank, if a company retaliates against a whistleblower employee for violating federal securities laws, the employee may recover:

  • Double back pay (with interest).
  • Compensation for litigation costs.
  • Expert witness fees.
  • Reasonable attorney’s fees.
  • Their job through reinstatement.

Eligible whistleblowers who uncover financial improprieties that lead to a successful SEC action that results in monetary sanctions exceeding $1 million may also receive between 10 and 30 percent of the recovery; this provision has resulted in millions of dollars in whistleblower awards over the past ten years.

Changing the Landscape of U.S. Financial Institutions

During a recent Brookings Institution webinar, panelists including former U.S. Senator Christopher Dodd and former U.S. Congressman Barney Frank discussed the impact their namesake reforms have had on the financial sector and the effects of recent legislation designed to weaken its regulations. Although the COVID-19 coronavirus outbreak has disrupted the ordinary operations of investors, consumers, and entire industries, Senator Dodd expressed his opinion that “we would be in a far deeper mess today if we had not done what we did in 2010… today all of our financial services are playing a critical role in getting us back on our feet again.”

In this video produced by the Obama Foundation, former President Barack Obama, Senator Elizabeth Warren, former U.S. Secretary of the Treasury Timothy Geithner, and others reflect on the 2008 financial crisis and the federal government’s response with the Dodd-Frank Act and other measures:

Senator Warren described Dodd-Frank’s whistleblower retaliation protection provisions as essential tools to prevent unscrupulous companies from capitalizing on the chaos caused by the pandemic, noting that the CFPB has helped over 26 million victims of consumer fraud recover more than $12 billion.

Maxine Waters, Chair of the House Financial Services Committee, has praised the success of the CFPB in uncovering and preventing consumer fraud at the ground level, including targeting payday lending, rent-a-bank schemes, and other predatory lending practices. Further, she has also described the progress of diversity in the financial sector (reducing credit discrimination and increasing diverse employment), due to Dodd-Frank’s requirement that federal financial services agencies and each of the Federal Reserve Banks establish Offices of Minority and Women Inclusion (OMWIs) to collect and report on diversity data.

Challenges Continue

Recent legislation has rolled back or diluted some Dodd-Frank provisions, and numerous ongoing attempts seek to decrease government oversight further. In response to a Trump administration challenge to the power of the CFPB, the U.S. Supreme Court ruled earlier this year that the creation and maintenance of the CFPB is a constitutional use of congressional authority. Despite such attacks, the act’s protections remain essential for both consumer protection and the stability of the U.S. financial industry, especially in light of the ongoing COVID-19 pandemic.

The COVID-19 pandemic has transformed the world and has had a substantial impact on all industries and sectors. The SEC, through its Division of Enforcement, is actively responding to the ongoing crisis, addressing COVID-related misconduct. According to Division Co-Director Steven Pelkin, between mid-March and mid-May 2020, during the height of the COVID-19 pandemic, the SEC received more than 4,000 tips, a 35 percent increase over the same period last year. As the pandemic evolves, protections for whistleblowers will be increasingly essential to the purpose of Dodd-Frank and curbing another global financial crisis.


Ten years later, Dodd-Frank is not only essential, but working, to prevent financial misconduct across industries. Employees who are concerned about possible securities violations should consider consulting with a whistleblower attorney.

(*Prior results do not guarantee a similar outcome.)