Dodd-Frank and Consumer Protection

Question 1

What is the Dodd-Frank Act?

Answer 1

A federal law that was enacted to make changes affecting all federal financial regulatory agencies and almost every part of the nation’s financial services industry

Question 2

When was the Dodd-Frank passed and what was it a response to?

Answer 2

The Dodd-Frank Act was passed in 2010 in response to the 2008 financial crisis.

Question 3

What reforms has the Dodd-Frank implemented?

Answer 3

• Establishment of the Consumer Financial Protection Bureau (CFPB)
• Authorization of the Qualified Mortgage Rule
• Requiring an assessment of the borrower’s ability to repay a mortgage (i.e., establishment of the Ability to Repay Rule)
• Restricts loan originator compensation (i.e., authorizing the Loan Originator Compensation Rule)
• Requires new borrower disclosures to replace GFE and TILA disclosures (i.e., TILA-RESPA Integrated Disclosure Rule)
• Limits loan terms such as prepayment penalties, negative amortization, balloons, etc.