Chap 7 Dodd Frank ACT Flashcards
When DFA
2010
What is DFA
Dodd Frank ACT -
Components of Dodd-Frank Act
Financial Stability
The consumer Financial Protection Bureau (CFPB)
CFPB
CFPB established under DDA. It allows to prevent predatory mortgage lending and assisting consumers in understanding fundamentals of mortgage before signing on for loan.
CFPM
It prohibits mortgage brokers from earning high commissions on closing loans with high fees or high interest rates
It monitors credit and debt cards and addresses consumer complains.
It requires vendors to fully disclose information to consumers in easy-to-read terminology
Volcker Rule
It limits how financial institutions invest, not participate in proprietary trading and not speculate on trading. Banks are not permitted to be involved with private equity firs or hedge firms that are traditionally considers to be high risk
Credit Default Swaps
The act also has a provision for oversees features like this.
SEC Office of Credit Rating
The office of credit rating is responsible for ensuring that credit companies/agencies offer reliable, accurate and meaningful credit ratings of the municipalities, commercial businesses and other establishments that assesses.
Whistleblowers Program
It is mandatory that whistleblowers can receive anywhere from 10 to 30% from litigation settlements.
Significant Feature of DFA were rolled back by Trump in 2018
The DFA was replaced by the Economic Growth, Regulatory Relief and Consumer Protection ACt
Criticism of the Dodd-Frank Act
Harming the competitiveness of US forms compared to their foreign counter parts.
Key Aim of DFA
To reduce extreme risks of financial industry.
Protect consumers from predatory lending
DFA is much diluted today due to the passage of the Economic Growth, Regulatory Relief and Consumer Protection Act of 2018
Final Point
DFA 2010 was enacted as answer to the major financial crisis of 2007-2008
TARP Troubled Asset Relief Program
