Dodd-Frank Bill Fails to Meet Consumer Expectations says Survey

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



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  • Dodd Frank was a bill rammed down the throat of Republicans. It is a lot of pages with little support. It needs to be readdressed if not repealed and replaced with a new bill. The 112th Congress can do better.

  • The bill and other legislation passed to “protect the consumers” has led to a mass of confusion and paperwork, especially in the reverse mortgage area. I now print out a 175 page application and a number of my borrowers are frustrated with all the required paperwork. My only hope is that the government doesn’t pass more legislation designed to “simplify” the loan origination process.

  • The Dodd-Frank legislation, like most major accomplishments of Congress, is the result of a considerable amount of compromise between Democrats and Republicans, after all of the special interests have had their say. Unfortunately, the average consumer was not well represented at the table; the large, money center banks have emerged from the process with even more market hegemony than ever before.

    Some elements of the legislation will afford protections to the consumer, especially in the area of credit cards, but the banks already are figuring out alternative means of fleecing consumers.

    During the development of the legislation, Jamie Dimon and his brethren used their considerable influence to paint the small guy, the mortgage broker, as the villain in the financial meltdown. After all, the Wall Street banks only created the bad loan products — it was the mortgage broker who actually sold them to the end user.

    Unfortunately, MBA and NRMLA have not been our friends during the legislative process. They are dominated by the same banks who got us into the mess in which we find ourselves. Through our trade organization, NAMB, we mortgage brokers have one last chance to communicate our views during the rule-making process that actually will determine the final shape of financial reform.

    Go here to sign the petition:

    Our very livelihoods will depend on it.

  • The even lesser known but highly interesting portion of this act is the Nonadmitted and Reinsurance Reform Act (NRRA) which significantly impacts the insurance industry while simultaneously, creating the another useless bureaucracy, chipping away at the 10th Amendment and quietly – really but maybe not really – repealing the McCarran-Ferguson Act of 1945.

    The newly mandated Federal Insurance Office (FIO) isn’t there to protect the consumer and it certainly doesn’t have any powers should the states decide not to join in the compacts or agreements outlined in the bill. It is there to be a glorified hall monitor for state regulators. One part of the NRRA specifically deals with how and to whom premium taxes on surplus lines policies are paid. Should a state opt out of the mandated compacts or agreements between the states, they will either cheat themselves or cheat the other states out of tax revenue on surplus lines premiums and lose the income of licensing surplus lines brokers. The FIO and the Secretary of the Treasury have no real teeth here other than to nibble on the ankle of the NAIC about rules and procedures (they are to advise and monitor only) so it’s an empty gun. It’s nothing more than a data monitoring office; another overpaid bureaucratic appointment for friends of those in power.

    To add insult to injury, the NRRA calls for a unified tax filing system that all states use for brokers to file their taxes. The system must calculate the taxes, even on multi-state placements, and then allocate the correct sums to the participating states … and all in this must be created by the ridiculously short deadline of about 330 days. Sure, 51 jurisdictions will join together and map out this Utopian Tax Tool and then all line up to sign agreements locking them into its us …yeah, right. That happens just moments before the heavens open up and the purple fairy people descend upon us to spread candy scented thousand dollar bills.

    The McCarran-Ferguson Act exempts insurance from federal regulation as a form of commerce solidifying the states right to regulate commerce within their borders. There is the argument that the FIO not having any authority or power means that McCarran-Ferguson is still intact however; the fact that insurance transactions are now subject to monitoring from new federal agencies or by the newly expanded authority of existing offices makes that argument moot. Dodd-Frank expressly expands the arm of the Department of Treasury, Board of Governors of the Federal Reserve System, Office of the Controller of the Currency, Office of Thrift Supervision, Securities and Exchange Commission, Commodity Futures Trading Commission and few other bureaucratic burdens of stone. Premium taxes on surplus lines will be scrutinized and monitored by the Controller General of the United States; that may not be the kill-shot on McCarran-Ferguson but it certainly looks as if the coffin’s been ordered and the flowers cut.

  • The Dodd/Frank bill or the “Financial Regulatory Reform” bill is the most damaging bill ever passed. The bill gives the Federal government more power than I have ever seen in my life time.

    The Federal government, through this bill can control our entire financial system. The Consumer Protection Bureau is made up of people that can dictate what happens to all your financial business.

    The bureau will have control over all lending in our country. People that will have very little knowledge of our industry will and could be making decisions that could be disastrous. This bill, in its entirety needs to be revoked, we need to start all over again with it. This bill contains so many hidden items affecting all of our lives including IRA’S and 401-K’S. One has to look between the lines, but it is their.

    I am infuriated over this bill. This bill was shoved down everyone’s throat. Most of the legislators voting for it had no idea what they were voting for. Our congress and senate knew the majority of the American people would not understand what this bill was all about. Many people thought and still do that the bill was to control Wall Street. This is just a camouflaged bill to get what our politicians want with out the people knowing what they will wind up with in the end.

    My friends, please, write your congressmen and senators, tell them you want this bill revoked and start it all over again. If the bill is not repealed, revoked, we, the American people will pay dearly in the end.

    Thank you,

    John A. Smaldone

  • 175 pages only damages your reputation as someone that cares about your client. Its 45 pages at most and not all need signed and your clients will respect you for keeping it simple.

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