(Test 2) Dodd-Frank Legislation - Summary of the Dodd-Frank...

Summary of the Dodd-Frank Wall Street
Reform and Consumer Protection Act
The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111-203,
H.R. 4173) is a federal statute in the United States that was signed into law by President Barack
Obama on July 21, 2010. The Act is a product of the financial regulatory reform agenda of the
Democratically-controlled 111th United States Congress and the Obama administration.\
The law was initially proposed in the House by Barney Frank, and in the Senate Banking
Committee by Chairman Chris Dodd. Due to their involvement with the bill, the conference
committee that reported on June 29, 2010, voted to name the bill after the two members of
Congress. The Act, which was passed as a response to the late-2000s recession, is the most
sweeping change to financial regulation in the United States since the Great Depression, and
represents a paradigm shift in the American financial regulatory environment affecting all
Federal financial regulatory agencies and affecting almost every aspect of the nation's financial
services industry.
Following is a brief summary of the Legislation:
1. It creates a new and independent watchdog to ensure that American consumers have clear
and accurate information when shopping for mortgages, credit cards and other financial products.
In addition it will work to protect consumers from hidden fees, abusive terms, and deceptive
practices.
•
Has the authority to examine and enforce regulations for banks and credit unions with
assets of over $10 billion. It also extends these powers to all mortgage related businesses
(lenders, servicers, and brokers), payday lenders, and student loan lenders, as well as debt
collectors and consumer reporting agencies.
• Creates a new Office of Financial Literacy, and a National Consumer complaint hotline.
2. Ends “Too Big to Fail”: the legislation creates a safe way to liquidate failed financial firms,
and imposes tough new capital and leverage requirement that will make it undesirable to get too
big.