The Dodd Frank Wall Street Reform And Consumer Protection Act

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.

The Sarbanes-Oxley Act of 2002 (SOX), also known as the Public Company Accounting Reform and Investor Protection Act and the Auditing Accountability and Responsibility Act, was signed into law on July 30, 2002, by President George W. Bush as a direct response to the corporate financial scandals of Enron, WorldCom, and Tyco International (Arens & Elders, 2006; King & Case, 2014;Rezaee & Crumbley, 2007). Fraudulent financial activities and substantial audit failures like those of Arthur Andersen and Ernst and Young had destroyed public trust and investor confidence in the accounting profession. The debilitating consequences of these perpetrators and their crimes summoned a massive effort by the government and the accounting profession to fight all forms of corruption through regulatory, legal, auditing, and accounting changes.

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

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.

This memorandum discusses a brief history of Pat, his wrongdoings and related action, and the response by the related law enforcement agencies.

Dodd-Frank is the latest financial reform passed by Congress, and by far the most extensive. According to Amadeo, Dodd-Frank is “the most comprehensive reform since the Glass-Steagall Act of 1933” (2012, para.1). The goals of Dodd-Frank are to implement consumer protections, end bailouts with tax payer money, create a council to identify risks, eliminate loopholes for risky behavior, implement say on pay for executives, protect investors, and enforce strict regulations on Wall Street (House of Representatives, n.d.). Dodd-Frank lacks clarity and is lengthy, running over 1,000 pages long (New York, 2012). In many cases, Dodd-Frank does not contain explicit rules, but instead creates an outline whereby financial oversight agencies have been charged with conducting research and writing and implementing the rules.

The purpose of Dodd-Frank Act is focused on restrictions on the banking sector; repealing Dodd-Frank will enable the financial market to return to a more volatile state. Moreover, the purpose of the Volker Rule is to prohibit banks from proprietary trading and restrict banks investments in hedge funds and private equity funds to prevent banks from high-risk trading activities. Therefore, from the lessons we all have learned during the 2008 financial crisis, we should not reduce government regulation in the financial sector. Instead, we should maintain our policies, continue to monitor the health of our economy, and prevent corporate misconduct. In addition, I will recommend Mr. Sessions continue to follow the Yates Memo to hold executive level individuals accountable for their misconduct. And I will also support Senator Warren's proposed 21st Century Class Steagall-Act of 2017. This act will protect our economy by restricting the bank's ability to engage in high-risk activities, reducing the size of "too big to fail" corporations, and minimizing the probability of government bailout. As one might be expected, my recommendation to Mr. Sessions will face a lot of setbacks. However, as a public servant, protect the law, maintain its fairness regardless the areas

In 2007-2008 the US went into a recession, a financial crisis that has since then taken five years to rebuild. During that time millions of Americans were unemployed and faced many economic struggles which negatively impacted the real estate market causing a multitude of foreclosures. The reason for this recession was because there was no authority over banks and they were not being monitored properly. Banks were able to gamble with the finances of millions of people with no consequences towards their actions. The Dodd Frank Act Wall Street Reform and Consumer Protection Act of 2010 was put into place to make sure that nothing like this ever happened again; The Dodd Frank Act implemented and set laws into place to make sure that banks and financial

Prior to the 2008 economic depression, obtaining a mortgage was relatively simple for home buyers. However, many of those mortgages had provisions that made it difficult for borrowers to repay their mortgages (“Dodd-Frank,” n.d.). As a result, many homeowners lost their homes when they were unable to repay their mortgages, which led to the real estate crisis. In 2010 the Mortgage Reform and Anti-Predatory Lending Act, also known as the Dodd-Frank Act, was enacted to reform how mortgage servicers vetted borrowers and to eliminate the use of predatory loan practices (Cheeseman, 2013, p. 485). Under the Dodd-Frank Act, creditors must establish borrower’s credit history, income and expected income, debt-to-income ratio, and other factors before

The Dodd-Frank Act has a market-saving impact in numerous ways, including but not limited to: Starting a financial stability oversight council which actively monitors the stability of large firms whose bankruptcy could have a major negative impact on the economy, the act also provides money to assist with dismantling financial companies that have been placed in receivership, and prevents tax dollars from being used to prop up such firms, which previously was a large waste of tax payer money. It also stops predatory mortgage firms who lend to people who can't afford it, which helped cause the 2008 financial crisis*. While many Republicans will try to convince you that Wall Street’s heavy regulation is killing small banks and reducing the big

The Volcker Rule is said to limit speculative trading and do away with proprietary trading by banks. This change could make it more difficult for banks to be profitable. The act also contains a provision for regulating derivatives such as the credit default swaps that were widely blamed for contributing to the 2008 financial crisis. The Volcker Rule also regulates the financial firms' use of derivatives in an effort to prevent "too-large-to-fail" institutions from calling for big risks that might wreak havoc on the wider economic

Named after the United States senator Christopher J. Dodd and the United States Representative Barney Frank, the Dodd–Frank Wall Street Reform and Consumer Protection Act was signed in to federal law by the president Barack Obama on July 21, 2010 in an attempt to prevent the events that led to the 2008 financial crisis of occurring again. Commonly known as the Dodd-Frank, the act brought the biggest changes to regulations on financial institutions since the reforms on regulations that followed the Great Depression. The act creates regulatory agencies for financial institutions, as well as an oversight council that is in charge of assessing systemic risk. The council also has the power of restraining the growth of large financial institutions

While Dodd Frank was held as an act that would increase capital and liquidity buffers banks held and reign in the risky behavior of financial institutions. In doing so it has cost a heavy burden to bank in the form of compliance cost and implications about its future impact on households and the financial sector. Listed are the six key provisions of Dodd Frank, in each highlighted area the pros and cons of that key aspect that will be discussed.

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