Which act, enacted in 2010, addressed the financial crisis by strengthening regulation and creating a consumer protection agency?

Which act, enacted in 2010, addressed the financial crisis by strengthening regulation and creating a consumer protection agency?

• A. Dodd-Frank Act of 2010
• B. Infrastructure Investment and Jobs Act of 2021
• C. American Recovery and Reinvestment Act of 2009
• D. CHIPS and Science Act of 2022

Answer: (A)

This question looks at how the government reformed the financial system after the 2008 crisis by tightening regulation and adding a dedicated consumer-protection agency. The Dodd-Frank Act of 2010 did exactly that: it overhauled financial regulation, expanding oversight of banks and other large financial firms, imposing tougher risk management and transparency requirements, and bringing the derivatives market under stricter supervision. It also created the Consumer Financial Protection Bureau, a new agency charged with protecting consumers in everyday financial products like mortgages, credit cards, and loans from unfair practices. In addition, it introduced mechanisms to monitor systemic risk and to wind down failing institutions if needed. The other options refer to infrastructure, stimulus, or science policy and do not address financial regulation and consumer protection.

This question looks at how the government reformed the financial system after the 2008 crisis by tightening regulation and adding a dedicated consumer-protection agency. The Dodd-Frank Act of 2010 did exactly that: it overhauled financial regulation, expanding oversight of banks and other large financial firms, imposing tougher risk management and transparency requirements, and bringing the derivatives market under stricter supervision. It also created the Consumer Financial Protection Bureau, a new agency charged with protecting consumers in everyday financial products like mortgages, credit cards, and loans from unfair practices. In addition, it introduced mechanisms to monitor systemic risk and to wind down failing institutions if needed. The other options refer to infrastructure, stimulus, or science policy and do not address financial regulation and consumer protection.