Despite overwhelming support from Americans for Congress to enact financial legislation to prevent future bailouts, results from the Chicago Booth/Kellogg School Financial Trust Index found the Dodd-Frank Bill failed to meet consumer expectations.
According to the survey, only 12 percent of respondents said they were satisfied with the Dodd-Frank Bill while 54 percent of Americans were dissatisfied.
Designed as a way to look at Americans’ trust in the nation’s financial system, the index measures the publics opinion over three month periods to track changes in attitude. The latest data shows that trust in the financial system dropped to 25 percent in September from 26 percent in July 2010, the Index’s all-time high.
“A primary consequence of the 2008 financial crisis was a large drop in trust Americans had in financial institutions, and we’re seeing a continued decline despite reform enacted to combat this sentiment,” said Paola Sapienza, co-author of the report and professor of finance at the Kellogg School of Management. “Interestingly, Americans who declared themselves satisfied with the Dodd-Frank Bill trust banks eight percent more, but unfortunately only a minority is happy with the legislation.”
When it comes to bailouts, two thirds of respondents believe the bill is insufficient to prevent future bailouts. The majority of Republicans (80 percent) are dissatisfied with the bill, as are Independents (54 percent). The level of those “satisfied” and “very satisfied” is low even among Democrats (35 percent).
The overwhelming dissatisfaction with the bill comes from two questions related to legislation: the creation of the Consumer Financial Protection Agency (CFPA) and the new regulation of banks enacted to prevent future bailouts. The responses suggest that the Dodd-Frank Bill failed to convince American voters of its utility on both dimensions and found that only 34 percent of respondents think that the CFPA is a “useful agency to protect consumers.” The majority of the opposition stems from the perception that the CFPA is “useless bureaucracy” (27 percent) and “overreaching of government power” (25 percent).
To view the report, see here