Dodd-Frank Wall Street Reform and Consumer Protection Act | The Department of Financial Protection and Innovation (2024)

FAQs

What does the Dodd-Frank Wall Street Reform and consumer Act do? ›

Ending bailouts: Reform will constrain the growth of the largest financial firms, restrict the riskiest financial activities, and create a mechanism for the government to shut down failing financial companies without precipitating a financial panic that leaves taxpayers and small businesses on the hook.

Dodd-Frank defines a financial company as one incorporated or organized under any provisions of State or Federal law and is a bank holding company as defined under the Bank Holding Company Act of 1956, a nonbank financial company supervised by the Board of Governors of the Federal Reserve System (the “Fed”), a company ...

The Dodd-Frank Act created four new federal agencies: the Consumer Financial Protection Bureau (CFPB), the Office of Financial Research (OFR), the Federal Insurance Office (FIO), and the Financial Stability Oversight Council (FSOC).

To protect consumers from abusive financial services practices.

Previously, banks could use depositor funds to trade in securities. Because of this, in 2008, JPMorgan Chase lost $6.2 billion on risky trading. To prevent similar cases, the Dodd-Frank Act has created a Volcker rule. It prohibits banks from trading customer's deposits for their profit and using or owning hedge funds.

The Act gave the Bureau broad authority to protect consumers from unfair, deceptive, or abusive acts and practices and transferred lender data collection responsibilities under the Home Mortgage Disclosure Act from the Federal Reserve to the Bureau.

The Dodd-Frank Act restricted the emergency lending or bailout authority of the Federal Reserve by: Prohibiting lending to an individual entity. Prohibiting lending to insolvent firms. Requiring approval of lending by the Secretary of the Treasury.

Examination and Enforcement: Authority to examine and enforce regulations for banks and credit unions with assets of over $10 billion and all mortgage-related businesses (lenders, servicers, mortgage brokers, and foreclosure scam operators), payday lenders, and student lenders as well as other non-bank financial ...

Dodd-Frank is intended to curb the extremely risky financial industry activities that led to the financial crisis of 2007–2008. Its goal was, and still is, to protect consumers and taxpayers from egregious practices like predatory lending.

Title X of this Act creates a new Bureau of Consumer Financial Protection within the Federal Reserve Board as a new supervisor for certain financial firms and as a rulemaker and enforcer against unfair, deceptive, abusive, or otherwise prohibited practices relating to most consumer financial products or services.

Was the Dodd-Frank Wall Street reform Act a response to the financial crisis of 2008? ›

The Dodd-Frank Act, signed into law in July 2010, spans 2,300 pages and directs federal regulators to burden job creators and the economy with more than 400 new rules and mandates. The Act was touted by its supporters as “Wall Street reform” and Washington's response to the financial crisis of 2008.

In the aftermath of the 2008 financial crisis, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act) enhanced the CFTC's regulatory authority to oversee the more than $400 trillion swaps market.

Dodd–Frank reorganized the financial regulatory system, eliminating the Office of Thrift Supervision, assigning new jobs to existing agencies similar to the Federal Deposit Insurance Corporation, and creating new agencies like the Consumer Financial Protection Bureau (CFPB).

Simple principles like. . . . Markets should be transparent. Regulation should be consistent, without gaps that can be exploited by those who wish to indulge in risky, destabilizing or illegal behavior. Market participants, not taxpayers, should bear the risks of their market activities.

Background: Section 922 of the Dodd-Frank Wall Street Reform and Consumer Protection Act provides that the Commission shall pay awards to eligible whistleblowers who voluntarily provides the SEC with original information that leads to a successful enforcement action yielding monetary sanctions of over $1 million.

Answer. The following statement about the Dodd-Frank Wall Street Reform and Consumer Protection Act is true: It was designed to make the financial services industry more responsible. So the right option is (d). The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed into law in July 2010.

Title V of the Dodd-Frank Act establishes a Federal Insurance Office (FIO) within the Department of the Treasury to promote national coordination in the insurance sector.

What are the five areas included in the​ Dodd-Frank Act of​ 2010? Consumer​ protection, resolution​ authority, systemic risk​ regulation, Volcker​ rule, and derivatives. a well-capitalized financial institution has​ ________ to lose if it fails and thus is​ ________ likely to pursue risky activities.