Dodd-Frank Wall Street Reform Analysis

On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which is commonly referred as the Dodd-Frank Act. This act was passed as a response to the Great Recession in order to prevent potential financial debacle in the future. This regulation has a significant impact on American financial services industry by placing major changes on the financial regulation and agencies since the Great Depression. This paper examines the history and impact of Dodd-Frank Act on American financial services industry.

ABSTRACT There are many analyses of the economic effects that regulations, in general, and Sarbanes-Oxley Act, in particular, have had on American business. This analysis looks at the effect that the Sarbanes-Oxley Act has had on the American banking industry. The return on assets and return on equity were obtained from the Federal Reserve Bank for all SEC-registered and nonregistered banks for the period 2000

The Consumer Financial Protection Bureau, more commonly referred to as the CFPB, can trace its origins to the 2008 financial meltdown. Authority for the creation of the CFPB stems from the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was named for the bill's sponsors, Sen. Chris Dodd and Rep. Barney Frank. The Dodd-Frank was aimed primarily at regulating banks, the stock exchange, mortgage lenders and similar high-value financial markets. However, the CFPB was also given the power to combat "abusive, unfair or deceptive" practices that impacted average consumers. It is this power that the CFPB has invoked in its war against cash advance loans and other small-dollar, high-risk, short-term loans. The war began almost as soon

However, banks can keep any funds that are less than three percent of revenue.The Volcker Rule does allow some trading when it's necessary for the bank to run its business. For example, banks can engage in currency trading to offset their own holdings in a foreign currency. But the Volcker rule is not in place yet, and some of its rules are still being decided. It is scheduled to go into effect in July 2012. However, regulators say they might not have all the rules in place by then. Dodd-Frank requires that the riskiest derivatives, like credit default swaps be regulated by the

The Glass-Steagall Act of 1933 that defined the roles for commercial banks, investments banks and insurance firms was over ridden by the Gramm-Leach-Bliley Act (1999) which repealed the provisions that restricted affiliations in financial institutions. Hence one solution is to overcome the incentive problem and the conflict of interests that arise when financial institutions simultaneously undertake financial activities of varied nature.

On July 21, 2010, in Washington D.C., President Barack Obama signed into federal law the Dodd Frank Wall Street Reform and Consumer Protection Act, better known as the Dodd-Frank Act. The much criticized law, was passed as a response to financial effects of the financial crisis of 2007-2010 and presented changes to the country’s regulatory environment directly affecting all federal regulatory agencies and the financial services industry. The controversial law.

The full name of the bill is the Dodd-Frank Wall Street Reform and Consumer Protection Act, but it is mostly known as Dodd-Frank. The Dodd-Frank Act is a United States federal law, which is divided into sixteen titles that places major regulations on the financial industry with the purpose of restraining another major financial market collapse. The stated aim of the legislation is: “To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end "too big to fail", to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes” (Thomas, 2010).

I believe the Frank-Dodd Act accomplishes what it is intended for because of the many changes banks now do their business. Banks should be kept as banking and not risking money that people trust them to save. Money is hard to earn and people want to put away some in order to have a good retirement. Before if you went overdraft at the bank they used to charge you an “overdraft fee” regardless you wanted them to approve it or not. Now you have the option of what many banks call “overdraft protection” where they still charge you the overdraft fee and cover your purchases. Now you have the choice to permit the bank. Before credit card application were

Government departments are instrumental to a flourishing and secure economy. They are in place to serve their constituents and ought to keep that in mind. The Federal Deposit Insurance Corporation (FDIC) fits this well and is in place to ensure that bank users are protected in instances of economic downturn and that their money is insured. In this way, regulation is extremely necessary to ensure a stable economy in instances of financial instability. To completely understand the FDIC, it is important to understand why and how it was created, its history, major responsibilities and who the leaders are.

The proposal currently has nine Republican signatures and nine Democrat, which means that it has enough to clear both the banking panel and the Senate if all Republicans agree with it. There has been some strong opposition again the legislation as Ohio Senator Sherrod Brown says, “it would do little to help working families”. However, Senator Crapo believes that this is the first proposal with a genuine chance of making it to the president. The authors conclude the article with two statements, the first explains that banks with assets between $50-$100 billion would be immediately exempt, and banks between $100-$250 could be exempt after 18 months. The second statement was from an analyst at Evercore ISI saying that he wasn’t sure if these regulation changes would result in cost savings because banks have been viewing them as sunk costs.

One of the principal functions of the Federal Reserve in achieving this goal is to regulate and supervise various financial entities. It performs this function, in part, through microprudential regulation and supervision of banks; holding companies and their affiliates; and other entities, including nonbank financial companies that the Financial Stability Oversight Council (FSOC) has determined should be supervised by the Board and subject to prudential standards. In addition, the Federal Reserve engages in “macroprudential” supervision and regulation that looks beyond the safety and soundness of individual institutions to promote the stability of the financial system as a

The old saying the fox is going to watch the henhouse is some of it for same problems we run into with regulators regulating themselves. Part of the systemic problem that existed in the late part of the first decade of the 21st century were government entities known as Fannie Mae and Freddie Mac. Both of these government institutions would just as responsible as the banks themselves for the crisis that took place and sworn new regulation which may not be far-reaching enough.

While there are many more provisions and over 2000 pages included in the Dodd Frank Act most of these provisions have yet to be implemented. The Know before You Owe Act and the Credit Card Act are two provisions that one can actually see the change and progress happening within these acts. These provisions are two examples on just how beneficial the Dodd Frank Act is and will continue to be towards consumers. This act helps consumers to understand and know just what they are purchasing and nothing is hidden so that brokers and banks can’t take advantage of consumers like what happened in 2007 and

After the 2008 financial crisis the Dodd Frank Act added more strenuous regulatory measures to financial institutions and how they conduct their business operations. One of the most reasons this Act was passed is to regulate bank holding companies, also known as BHCs, ability to remain sustainable during challenging economic conditions. On October 20, 2016 J.P Morgan published the results of the DFAST (Dodd-Frank Act Stress Test).

Key words: Glass-Steagall Act, Financial Institutions Deregulation and Reform Act, Dodd-Frank Act, investment bank, financial statements.