A Study Of The Dodd Frank Act Essay

The Federal Reserve is the single entity in control of the monetary policy of the United State of America. Monetary policy is the process that the Federal Reserve takes in order to control the supply of money and to attempt the control the direction of interest rates. The reason for doing these actions is in attempt to control the country’s inflation and employment rates, which are the biggest indicators and factors of a healthy economy.

The Consumer Financial Protection Bureau, or CFPB, was created as a tool of financial reform in the legislative package that was authorized by the Dodd-Frank Act, but the law specifically includes terms that prohibit setting interest rate limits, which is contrary to the 36-percent limit that the CFPB is currently trying to mandate as a universal limit on short-term rates. The specifics of the Dodd-Frank Act, according to the www.dodd-frank-act.us, state that the legislation grants, "NO AUTHORITY TO IMPOSE USURY LIMIT" unless such a limit is first passed through due legal processes.

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.

On December 23, 1913, due to a series of financial panics, the Federal Reserve System was created. The Federal Reserve, or the Fed, is the central banking system of the United States of America. The major financial crisis that mainly created the Fed system was the Panic of 1907, also known as the Knickerbocker Crisis. During the Panic of 1907 the New York Stock Exchange fell almost 50% from its peak the previous year. The Great Depression of 1930 was a key factor in the changes to the system. Through the years the Feds’ roles and responsibilities have expanded and its structure has evolved. Although the system was created because of an crisis, the U.S. Congress has established three key objectives for the monetary policy in the federal Reserve

Our economy is a machine that is ran by humans. A machine can only be as good as the person who makes it. This makes our economy susceptible to human error. A couple years ago the United States faced one of the greatest financial crisis since the Great Depression, which was the Great Recession. The Great Recession was a severe economic downturn that occurred in 2008 following the burst of the housing market. The government tried passing bills to see if anything would help it from becoming another Great Depression. Trying to aid the government was the Federal Reserve. The Federal Reserve went through a couple strategies in order to help the economy recover. The Federal Reserve provided three major strategies to start moving the economy in a better direction. The first strategy was primarily focused on the central bank’s role of the lender of last resort. The second strategy was meant to provide provision of liquidity directly to borrowers and investors in key credit markets. The last strategy was for the Federal Reserve to expand its open market operations to support the credit markets still working, as well as trying to push long term interest rates down. Since time has passed on since the Great Recession it has been a long road. In this essay we will take a time to reflect on these strategies to see how they helped.

A survey of 37 economists conducted by the University of Chicago in 2014, for example, found that nearly all believed that without the stimulus, the unemployment rate would have risen higher than it did.” In addition to this, President Obama strategized new regulations to protect consumers and to prevent another financial crisis. In 2009 and 2010, he signed the Credit Card Accountability Responsibility and Disclosure Act, the Dodd-Frank Wall Street Reform and the Consumer Protection Act into law. The CCARD Act restricted and obligated interest rates on credit card companies and obligated them to enact transparent policies. The Dodd-Frank created the Financial Stability Oversight Council and the Consumer Financial Protection Bureau which could disintegrate banks if it was possible to fail for any reason including but not limited to subprime loans.

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

In 2007, the financial crisis began. It was the most intense period of global financial strains since the Great Depression. It had led to a prolonged global economic downturn. The Federal Reserve took exceptional actions in response to the financial crisis to help stabilize the United

The Glass Steagall Act was passed on 1933, which is also known as The Banking Act to tighten regulation on the way banks did their business. This act was written as an emergency measure when about 5,000 banks failed during the Great Depression. Banks mostly failed because of the way they would invest with money. The act prohibits banks from investing money on investments that turn out to be risky. Banks could no longer sell securities or bonds. The act also created Federal Deposit Insurance Corporation (FDIC) to protect the deposits of individuals, which is still used to this date. The FDIC in this era insures your deposits in your bank up to $250,000. This gave the public confidence again to deposit their money in the bank. In 1933

The financial crisis did not happen in a day or two, it was triggered by a variety of events that happened.in years ago. In year 1998, The Glass-Steagall legislation was repealed, it is a legislation that separated investments and commercial banking activities in the financial sector. This act then allowed banks in the US to act in both the commercial and investment fields, which allowed them to participate in highly risky business. This is somehow responsible for the mortgage-backed derivatives, which is a main cause of the

One of the current topics in financial news concerns regulatory legislations and specifically the Dodd-Frank act that was enacted after the 2008 financial crisis. As with most regulatory legislations, there are both pros and cons with proponents to each side. I find the current arguments similar to the issues surrounding the Sarbanes-Oxley Act of 2002 that was enacted after many financial accounting scandals in the late 1990s. While many believe both pieces of legislations make the financial markets safer and more transparent, there needs to be a balancing act to allow capitalism to also flourish in a free economy.

With the emergence of technology, conflict minerals have become a growing and pressing issue in the 21st Century. Conflict minerals are those that fuel civil wars, specifically in Central Africa. There are very few regulations placed on conflict minerals and they are an integral part of most of the supply chains for technology companies. In 2011 the United States of America issued the Dodd-Frank Act, which regulates the use of conflict minerals to a certain degree. The problem, however, lies in the effectiveness and the real world consequences of the Dodd-Frank Act, thus alternative solutions must be explored in order to regulate the current and future use of conflict minerals.

The financial crisis of 2008 turned the world upside down. It is said to be the worst financial situation for the United States since the Great Depression in the 1930’s. Millions of people all over the country lost their jobs, retirement funds, and even houses. After all this chaos and distress, the United States government still bailed out the banks that were supposedly ‘too big to fail’. There were many things that attributed to the big banks going under. Some of the factors that caused these banks to crash were high risk transactions, a very complex financial market, and even the lack of regulation throughout the industry (DeGrace). Although these played a large role in the

Farrell, Pappalardo and Shelanski (2010) pointed out that the Bureau of Economics “BE” of the Federal Trade Commission “FTC” works to accomplish the missions of the FTC including the competition “antitrust” and consumer protection missions. Therefore, they focus on case-specific policy analysis and litigation support work for the consumer protection. Consequently, for example, the FTC continues to make rules to rescue mortgages and debt industries. Particularly these debts grew significantly during the financial crisis and the recession. Further, the agency works to improve and unify mortgage disclosures to support better consumer choice for these loan products (Farrell, Pappalardo & Shelanski (2010).

“The ongoing economic and financial turmoil that started in 2007 has again put financial institutions at the centre of harsh debate and massive critism,……banks had gradually relaxed their screening and monitoring standards before the crisis, especially in the US subprime mortgage market. Then, they sharply curtailed new credit and forced firms to reduce their investments, hence propagating the financial crisis to the real economy,” (J.Godlewski, 2013, p1).