Tag Archives: Consumer Bankrtuptcy Data

Dodd-Frank Act, What Is It?

The Dodd–Frank Wall Street Reform and Consumer Protection Act was signed into federal law by President Barack Obama on July 21, 2010.  The ACT was a response to the financial crisis of 2007–2008, and brought the most significant changes to financial regulation in the United States since the regulatory reform that followed the Great Depression.

It was designed to promote the financial stability of the US by improving accountability and transparency in the financial system, to end “too big to fail”, to protect the American taxpayer by ending bailouts, and to protect consumers from abusive financial services practices.

The Act changed the existing regulatory structure, and created a streamline to the regulatory process. Agencies that were previously not required to do so, were compelled to report to Congress on an annual (or biannual) basis and present results of current plans and explain future goals

Some of the important new agencies created included the Financial Stability Oversight Council, the Office of Financial Research, and the Bureau of Consumer Financial Protection.

As a practical matter, prior to the passage of Dodd–Frank, investment advisers were not required to register with the SEC if the investment adviser had fewer than 15 clients during the previous 12 months and did not hold itself out generally to the public as an investment adviser. The act eliminated that exemption, thereby rendering numerous additional investment advisers, hedge funds, and private equity firms subject to new registration requirements.

Certain non-bank financial institutions and their subsidiaries were supervised by the Fed in the same manner and to the same extent as if they were a bank holding company.

To the extent that the Act affected all federal financial regulatory agencies, eliminating one (the Office of Thrift Supervision) and creating two (Financial Stability Oversight Council and the Office of Financial Research) in addition to several consumer protection agencies, including the Bureau of Consumer Financial Protection, this legislation in many ways represented a change in the way America’s financial markets would operate in the future. Few provisions of the Act became effective when the bill was signed.

Major reform to the Dodd-Frank Act is underway in Washington today.  We’ll keep you posted!