What is the Dodd-Frank Wall Street Reform and Consumer Protection Act known for?

The Dodd-Frank Wall Street Reform and Consumer Protection Act is known for overhauling the U.S. financial sector, particularly in response to the financial crisis of 2007-2008. This legislation aimed to increase transparency and accountability in the financial system to prevent a similar crisis from occurring in the future. Key features of the Dodd-Frank Act include the establishment of the Consumer Financial Protection Bureau (CFPB), stricter regulations on financial institutions, the Volcker Rule, which restricts proprietary trading by banks, and requirements for financial companies to undergo stress testing.

By increasing regulatory oversight and implementing new rules, the Act sought to reduce risks and protect consumers from abusive financial practices, thereby transforming the landscape of financial regulation in the United States. The focus on reforming the financial sector is what distinguishes this legislation from other choices, which pertain to different areas such as international trade, tax reductions, or healthcare reforms.