Q1: Describe The Principles And Processes For Setting Executive

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.

Compensation systems can take on many forms, all of which have positives and negatives related to it. However, certain components are noted to be determinants of solid compensation plans. One agreement of a solid compensation system is the use of incentives. “Clearly a successful companies set objectives that will provide incentives to increase profitability” (Needles & Powers, 2011). Incentive bonuses should be measures that the company finds important to long-term growth. According to Needles & Powers (2011) the most successful companies long term focused on profitability measures. For large for-profit firms, compensation programs should offer stock options. The interweaving between the market value of a company’s stock and company’s performance both motivate and increase compensation to employees As the market value of the stock goes up, the difference between the option price and the market price grows, which increases the amount of compensation” (Needles & Powers, 2011). Conclusively, a compensation plan should serve all stakeholders, be simple, group employees properly, reflect company culture and values, and be flexible (Davis & Hardy, 1999; The Basics of a Compensation Program).

Firstly, the background of passing Dodd-Frank Act is the financial crisis. The direct reason of this crisis is that many banks, for the purpose of the making profits, were engaged in the high-risk subprime mortgage. Finally, the default of repayment leads to the

The Consumer Finance Protection Bureau (CFPB) governs many financial institutions. The finance and Insurance office at your local dealerships is considered a financial institution. We collect credit information, originate loans, and act on behalf of lenders. This

The Consumer Financial Protection Bureau (“CFPB”) is tasked with writing and enforcing rules for financial entities to protect consumers from unfair, deceptive or otherwise harmful practices by such entities. A major area of focus for the CFPB is a robust and effective oversight of a financial institution’s third-party providers (vendors) to ensure consumers are not exposed to unnecessary risk of financial or personal harm.

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

The Dodd-Frank Act was enacted to deal with the various problems occurred in the financial crisis. The paramount reason I choose this law is it has brought the most significant changes in the federal financial regulation since the regulatory reform that followed the Great Depression. (Damian & Lucchetti, 2010)

Before the advent of the Federal Deposit Insurance Corporation (FDIC) in 1933 and the general conception of government safety nets, the United States banking industry was quite different than it is today. Depositors assumed substantial default risk and even the slightest changes in consumer confidence could result in complete turmoil within the banking world. In addition, bank managers had almost complete discretion over operations. However, today the financial system is among the most heavily government- regulated sectors of the U.S. economy. This drastic change in public policy resulted directly from the industry’s numerous pre-regulatory failures and major disruptions that produced severe economic and social

To begin with, it is clear that the management team including CEO and senior level managers would benefit from a healthy bottom line during their tenure, as their compensation packages typically are structured to be linked to company performance as a way to align management and shareholders’ interests (Bergstresser & Phillipon, 2009). Company’s profitability matters to shares price. The more profitable a company is, the more attractive it will be for the potential investors.

The banks were bailed out in 2008 because the government wanted to buy $700 billion to buy distressed mortgage, and to take off debts on the banks books. The bailout created a bill called the Troubled Assets Relief Program. This means troubled banks have the right to submit a bid price to sell their assets to TARP as part of a reverse auction. This act helps the government know they did not spend a certain amount of money. The bank was bailed out by George Bush in October 3, 2008. The Volcker Rule affect the risky investment by having a hold on what type of trading that the banks do. This Act does not allow investment banks into trading with low quality assets, as in options, derivatives and

Some of the main provisions of the Dodd-Frank Act removed the burden imposed on the taxpayers and are now holding Wall Street accountable for any firm that fails in the future7. In addition, the Volcker Rule has been implemented, in essence this rule prohibits banking institutions to do other activities unconnected to assisting their customers; this provision separates “proprietary trading” (which includes the banks being “allowed to own, invest, or sponsor hedge funds, private equity funds, or proprietary trading operations for their own profit”) from the activity of banking

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

Since 1933, the United States government has provided varying degrees of regulation designed to protect the average banking customer from the risks of investment banking. The Glass-Steagall Act, the Dodd-Frank Act, and the Volcker Rule were implemented to try to keep banks from investing consumer deposits into riskier securities but deregulation and lobbying have created instability.

The Dodd–Frank Wall Street Reform and Consumer Protection Act were signed into federal law on July 21, 2010 by President Obama. These laws were passed in response to the financial crisis of 2008 with intent

The goal of financial regulation is to increase efficiency in the market, as well as enhance the market 's ability to absorb shock caused by financial instability. There are many reasons for financial instability, but it can be narrowed down to