Today, I was honored to join President Barack Obama as he signed into law the historic financial reforms included in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.
The bill signed by the President today provides for better accountability and transparency in our financial system, increased protections for American taxpayers by preventing abusive financial services practices, and the creation of a Consumer Financial Protection Bureau to help protect consumers when they make investments, take out mortgages, and use credit cards.
As your Attorney General for the last three and a half years, I have seen how important this kind of financial reform has become for consumers. Since the onset of the economic crisis, we’ve worked at the state level to hold Wall Street accountable, recovering money for Massachusetts homeowners and taxpayers.
In the AG’s Office, we’ve taken legal action on behalf of Massachusetts consumers against banks and Wall Street firms such as Goldman Sachs, Fremont Investment and Loan, Countrywide, and Merrill Lynch. Most recently, we reached a settlement with investment giant Morgan Stanley after an investigation into their role in the securitization and financing of subprime loans that will return $102 million to affected Massachusetts homeowners and the Commonwealth.
We’ve had some major successes – overall, recovering over $440 million in relief for investors and borrowers, providing mortgage relief for more than 15,000 homeowners, and returning over $50 million in taxpayer funds to the Commonwealth. However, it has remained clear that as we move forward and attempt to prevent this kind of meltdown from happening again, we’ve also needed meaningful reform at the national level.
I’m pleased that this reform bill includes the creation of a Consumer Financial Protection Bureau, housed in the Federal Reserve, which will have the power to generate and enforce meaningful consumer protections over banks, financial institutions, payday lenders, check cashers, and others. It’s also good news that our office, and Attorneys General across the country, will not face significant pre-emption from new federal reforms, and have been granted the power to enforce certain protections issued by this new Bureau.
Wall Street reform as passed today is just one step forward – but it is a significant one. It will help ensure that Massachusetts residents are better protected from abusive lending practices, and will not only help stabilize our economy, but will also help prevent future meltdowns. I want to commend the leadership of Congressman Barney Frank in crafting and passing these reforms, and for assuring that states continue to play a meaningful role in protecting consumers and taxpayers. Kudos to the House, Senate, and President Obama for this bill’s passage.
Learn more about this new law on www.WhiteHouse.gov.