Ch.10 - The Legal and Economic Environment of Financial Institutions Flashcards
Enhances public confidence Gives open access to markets Establishes industry practices Create opportunity for innovation Imposes barriers to entry Protect clients from institution failure Help the government manage monetary policy What are all of these services?
Accomplishments of the financial services industry and customer protection regulation
The ________ provides deposit insurance that is backed by the US government.
Federal Deposit Insurance Corporation (FDIC)
The NCUSIF provides deposit insurance for __________________ that are backed by the US government.
credit union accounts
National Credit Union Share Insurance Fund
NCUSIF
The Securities Investor Protection Corporation (SIPC) protects investors from losses due the failure of a…
securities firm
True or false?
The SIPC protects against investment losses that are not back by the US government.
True
Securities Investment Protection Corporation
SIPC
The Pension Benefits Guaranty Corporation (PBGC) protects __________ that are not backed by the US government.
defined benefit plans
The a law that gives protection from fraud when buying/selling securities by requiring the security to be supported with documentation.
AKA Truth in Securities
Securities Act of 1933
This act is created the SEC and allowed them power to regulate security firms, self-regulatory organizations (SROs), and requires reporting information by publicly traded companies.
Securities Exchange Act of 1934
This act formed the FDIC and separated banks according to the type of services they provide.
Banking Act of 1933
Glass-Steagall
This Act repealed the last bits of Glass-Steagall (Banking Act) and created new financial holding companies to perform underwriting, selling insurance and securities, and conducting commercial and merchant banking
Gramm-Leach Bliley Act of 1999
This Act applies to bonds and requires a contract agreement between the bond issuer and bondholder before the bond can be sold.
Trust Indenture Act of 1939
This Act regulates the organization of companies that perform mutual fund investing, reinvesting, and trading in securities. It also requires companies to fully disclose their financial status to investors.
Investment Company Act of 1940
This Act requires SEC registration for firms or sole practitioners compensated for advising about securities.
Investment Advisors act of 1940
This Act imposes minimum funding standards for retirement pension plans and created the Pension Benefit Guarantee Corporation.
Employee Retirement Income Security Act (ERISA) of 1974
As a direct response to Enron, the Act increased financial disclosure to prevent future fraudulent acts by corporate accounting boards. It also created the Public Company Accounting Oversight Board.
Sarbanes-Oxley Act of 2002
This Act returned the power of insurance regulation back to the states, as long as states regulated insurance.
McCarran-Ferguson Act of 1945
Most customer protection legislation is overseen by the…
Federal Trade Commission (FTC).
The _________ provides a toll-free hotline for a victim of identity theft.
Federal Trade Commission (FTC)
Federal laws generally prohibits discrimination in…
lending.
Federal laws generally require disclosure to borrowers and…
lenders.
This Act allows public assistance income to be included as their “normal” income
Prohibits discrimination based on race, sex, marital status, religion, age, or national origin
And any denial of credit must be explained.
Equal Credit Opportunity Act
This Act allow people to receive a credit report, remove incorrect information from the report, know who requested the report, file a dispute, and add explanations to the report.
Fair Credit Reporting Act
This Act requires creditors to provide clear disclosure of key terms regarding amount financed: APR, payment schedule, penalties, and other fees of a lending agreement.
Truth-in-Lending Act
This Act allows customers to receive an annual free copy of their credit report from any customer-reporting agency.
Fair and Accurate Credit Transactions Act of 2003
This Act establishes dispute procedures for credit card billing errors, where debtors are responsible for $50 at the most.
Fair Credit Billing Act
This Act limits customer liability for an unauthorized use of a debit card.
Electronic Fund Transfer Act
This Act prohibits harassment, threats, false statements, wage garnishment, or property seizure by debt collectors and creditors.
Fair Debt Collection Practices Act
This Act made identity theft a crime.
Identify Theft and Assumption Deterrence Act
This Act made a change away from fixed-price brokerage commissions.
May Day 1975
This Act was as a response to the financial crisis of 2008. It regulates OTC swaps, increased regulatory enforcement and raised SIPC coverage to $250k. It also created the Consumer Financial Protection Bureau.
Dodd-Frank Act
This Acts insures there is always a liquid market for consumers to spend in ways that will stimulate the economy.
Consumer Protection Act
What act established the limit for assets under management and drove the development of IA-1633 (Requires investment advisers/financial planners to register with SEC)
The Investment Advisers Supervision Coordination Act of 1996
What act requires the Federal Reserve Board approval for the establishment of Bank Holdings Companies
Bank Holding Company Act of 1956
What act established “NOW” accounts and established the Depository Institutions Deregulation Committee granting powers to Thrift institutions
Depository Institutions Deregulation and Monetary Control Act of 1980
Permits adequately capitalized and managed banks to acquire banks in any state
Reigle-Nelson Interstate Banking and Branching Efficiency Act of 1994
Eased regulation seen as impediments to raise capital for small businesses and startups. Removed prohibition of general solicitation and advertising, and allowed crowdfunding and online portals to raise capital from non-accredited investors.
Jumpstart Our Business Startup Act (JOBS)
Delineated the requirements for SEC and State regulations of investment advisers and established the national de minimis standard for State regulation.
National Securities Market Improvement Act of 1996
Intended to restore public confidence in the savings and loan industry. Abolished Federal Savings and Loan Insurance Corporation, giving the responsibility to FDIC.
Federal Institutions Reform, Recovery, and Enforcement Act of 1989
(FIRREA)
