Banking Legislations Flashcards
Created a national banking system, OCC, dual banking, & national currency.
Bank Act of 1863
Created a central bank, the Federal Reserve System to manage the U.S monetary system. ( The FED sets interests rates and manages inflation)
Federal Reserve Act of 1913
Separated commercial & investment banking to reduce risk in the banking system. Also prohibited banks from paying interest on demand deposits, raised the minimum capital requirement of national banks part of the FED from underwriting securities and also created the FDIC. (enacted after the Great Depression)
Banking Act of 1933
Gave the FED authority to set margin requirements. Established the Securities and Exchange Commision (SEC) to regulate the stock market. (companies must disclose important financial info to investors)
Securities Exchange Act of 1934
Reformed & strengthened the Federal Reserve System. Also gave the FDIC authority to examine member banks & take action to reduce possibility of troubled banks, authorized FDIC to pay depositors if an insured bank fails. ( gave the Federal REserve board more control over monetary policy)
Banking Act of 1935
Mandates full disclosure of loan terms to protect consumers. REquired all lenders to make meaningful disclosure of their credit and leasing terms so customers can compare loans, includes Title 1: Truth in Lending Act. (C.C companies must disclose interest rates and fees)
Consumer Credit Protection Act of 1968
Deregulated interest rates and expanded the Federal Reserve’s control. Redefined banking powers to allow banks to offer new products, restrictions on interest rates banks could pay were phased out, intro of NOW accounts
Depository Institutions Deregulation & Monetary Control Act of 1980
Allowed savings institutions to offer adjustable-rate mortgages. Allowed banks to offer money market deposit accounts (MMDA) (Ex. banks can offer mortgage loans w/ interest rates that change over time)
Garn-ST. Germain Depository Institutions Act of 1982
Allowed banks to operate across state lines & consolidate branches
Riegle-Neal Interstate Banking & Branching Efficiency Act of 1994
Repealed part of the Glass-Steagall Act of 1933, allowing banks to offer commercial & investment services. (banks could now merge with insurance companies & brokerage firms)
Gramm-Leach-Bliley Act of 1999
Strengthened anti-money laundering regulations & allowed increased monitoring of financial transactions by placing responsibility on banks to track & prevent illegal transfer of funds by KYC & expanding requirements for reporting suspicious activities
USA Patriot Act of 2001
Introduced stringent auditing & financial regulations for corporations to protect shareholders. Did this by imposing new responsibilities on company executives,directors, audit communities, and accounting firms, applies to public companies
Sarbanes-Oxley Act of 2002
Aimed at reducing identity theft & giving consumers access to free credit reports. By curtailing identity theft & improving consumer access to credit report, while limiting sharing of certain customer information
Fair & Accurate Credit Transactions Act of 2003
Established rules such as several consumer protections including requiring creditors to provide expanded written notice to consumers before changing interest rates or terms of a credit card account; expanded protections of gift cards and other prepaid cards to protect consumers from unfair credit card practices
Credit Card Accountability, Responsibility, and Disclosure (Credit CARD) Act of 2009
A comprehensive financial reform law that increased regulation of financial institutions. It requires banks to set aside more capital, mandated changes in rules that govern mortgage lending, mandated changes in mortgage foreclosure processing procedures eliminated prohibition against paying interest on demand deposits set by
Banking Act o 1933 (created the CFFC)
Dodd-Frank Well St Reform & Consumer Protection Act of 2010
The E-Sign Act establishes the validity of electronic signatures and records in interstate and global commerce, making them legally equivalent to handwritten signatures and paper documents.
Electronic Signatures in Global and National Commerce Act (E-Sign Act) of 2000
Regulation J governs the collection of checks and funds transfers handled by Federal Reserve Banks, including the rules for processing checks and the role of Reserve Banks in wire transfers (Fedwire).
Regulation J (Fed) – Collection of Checks & Funds Transfer ( intitially implemented in 1917)
.The substitute check allows banks to process checks electronically. It must include an image of the front and back, a MICR line, all original check details, endorsements, and a statement that it’s a legal copy. This is governed by Regulation CC under the Expedited Funds Availability Act (EFAA).
Check Clearing for the 21st Century Act (Check 21) of 2004
Article 4 of the UCC governs the relationship between banks and their customers regarding the handling of deposits and the collection of checks. Describes the responsibilities of banks in the check collection process; bank automatically becomes a holder of an unendorsed instrument when it is accepted for deposit to the account of the payee or other holder
Uniform Commercial Code (UCC) Article 4 – Bank Deposits and Collections (initial draft 1954)
Provides standards for negotiable instruments, they must satisfy these requirements: payable to bearer, unconditional order to, pay, fixed amount of money, payable on demand, written and signed by drawer, defines holder in due course. Governs negotiable instruments, such as checks, promissory notes, and drafts, focusing on the rights and obligations of parties involved.
Uniform Commercial Code (UCC) Article 3 – Negotiable Instruments (initial draft in the 1950s)
Regulation E implements the Electronic Funds Transfer Act, consumer protections for electronic payments, including ATM transactions, direct deposits, and debit card payments. It does this by establishing rights, liabilities, and responsibilities of parties to electronic fund transfers (direct deposit of paychecks, SS payments, ATM transfers, etc)., Requires disclosures related to ETF such as recurring credits to deposit accounts
Regulation E (CFPB) – Electronic Funds Transfer Act (EFTA) 1978
Requires financial institutions to provide clear and accurate information about savings account terms, including interest rates and fees. Must give info so customers can compare deposit account features; requires 1 of 2 ways to calculate interest: daily balance or average daily balance, must disclose APY when opening an account
Regulation DD (CFPB): Truth in Savings Act 1991
Regulation D outlines the reserve requirements that banks must maintain in proportion to their deposit liabilities.This regulation ensures that banks have enough reserve capital to meet withdrawal demands and maintain financial stability.
Regulation D (Federal Reserve): Reserve Requirements of Depository Institutions (enacted 1980 revised since)
Regulation CC sets time limits on when banks must make funds available to customers after a check deposit. Designed to speed up check clearing and ensure that consumers have quicker access to their deposited funds, this regulation was passed in response to the inefficiencies in check processing.
Regulation CC: Expedited Funds Availability Act 1987
