Michelle Harner
It’s official; the President signed the Dodd-Frank Wall Street Reform and Consumer Protection Act yesterday. President Obama commented that the Act “is designed to make sure that everybody follows the same set of rules, so that firms compete on price and quality, not on tricks and not on traps” and that the reforms “represent the strongest consumer financial protections in history.“ Well, maybe. The Act certainly is historic and introduces the most sweeping financial reform concepts since the Great Depression. Nevertheless, lobbyists did succeed in exempting certain players (e.g., auto dealers, end-users, etc.) and clawing back certain provisions (e.g., funding for resolution authority, limits of accredited investor status, etc.). Moreover, the impact of many provisions depends largely on who is appointed to lead the charge (particularly with respect to the Consumer Financial Protection Bureau) and the content and enforcement of many yet-to-be-written rules. (Notably, one account estimates that the Act contemplates 243 new rules and 67 new studies.)
Much has been written on the Act, and this week at the Conglomerate blog, several law professors participated in a forum on the legislation. My contributions focused on the new resolution authority granted to the federal government under the Act (see here and here). If you are interested in the Act, I would encourage you to check out the forum; the posts have been outstanding and incredibly informative.
As part of the forum, the organizers asked participants if they planned to incorporate the Act into their lesson plans. As I reflected on the question, I realized the richness of the Act and the surrounding circumstances from a teaching perspective. Regardless of your views on its utility, the Act is an example of government in action, responding to a changing economic environment, public outrage and political pressures (both partisan and special interest group pressures). I think students interested in a transactional practice need to understand this process and its impact on businesses and their future clients. The challenge of course is presenting these important concepts in a concise, digestible and time-effective manner.
For my part, I plan to use an integrated discussion of the Act and the crisis at various points in my Business Associations and Bankruptcy and Creditors’ Rights courses. I most likely will select one or two aspects of the crisis that relate to the particular course, explore their potential causes and then examine how Congress chose to address them in the Act. For example, I might use risk management or executive compensation in Business Associations and consumer protection or Lehman Brothers in Bankruptcy and Creditors’ Rights. Whatever I pick, I hope to make the most of this very teachable moment.
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