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President Obama Addresses Threat to Consumer Financial Abuse

Posted on Jan 08, 2015

President Obama has said that while he expects changes from Republicans in January, those changes will not include any amendments of the Dodd-Frank consumer protection law.

On December 19, President Obama responded in a news conference that rollbacks to the 2010 statute would not be accepted as part of the deals between the Executive Branch and Congress, which will be dominated by Republican party members at the beginning of next year.

"If they try to water down consumer protections that we put in place in the aftermath of the financial crisis, I will say 'no'," Mr. Obama said. "And I'm confident that I'll be able to uphold vetoes of those types of provisions."

The Dodd-Frank law was passed in response to the 2007–2009 economic crisis. The statute marked the most governmental changes to financial regulation since the Great Depression, and attempted to avoid further recessions by ensuring accountability and federal regulation across all aspects of the nation’s financial services.

Among the provisions of the law are the consolidation of several regulatory agencies, regulation of financial markets, and consumer protection reforms that create uniform standards for products and increased protection for investors. The law also provided measures tightening regulations for credit reporting firms to increase accountability and transparency of their practices.

While President Obama may have threatened to veto changes to the Dodd-Frank law, Republicans in Congress have already passed one amendment already this year. Republicans, many of whom have decried the bill as an inefficient way to address the financial crisis, attached a provision to a government funding bill that passed in December 2014. The amendment would alter one section of the law, which the Obama administration reportedly explained as a compromise to allow higher funding for financial regulatory agencies.

Democratic lawmakers have responded unfavorably to the amendment, saying that the alteration was a way of appeasing members of Wall Street at the expense of consumers. It was felt that Republicans would be inspired to use this same strategy next year to undermine other provisions Dodd-Frank law, attaching riders to unrelated legislation that Democrats would not be able to vote against. President Obama rejected this notion, saying that any substantial changes to the regulations would be rejected.

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