How Did the United States Recover from the 2008 Mortgage Crisis?
The United States government passed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which increased regulatory oversight on financial banks. Specifically, the Act established two new agencies, the Financial Stability Oversight Council and the Consumer Financial Protection Bureau, which impose extensive regulations on banks with assets over $50 billion. The Volcker Rule was also enacted, which further prohibited banks from taking risky speculative bets with their financial trades.
Banks have also stopped granting subprime mortgage loans. The United States Consumer Financial Protection Bureau (CFPB) has enforced heightened restrictions on subprime mortgages, which include a higher down payment requirement that can reach up to 25%, and interest rates that can reach as high as 10%.