Dodd–Frank Wall Street Reform and Consumer Protection Act
What is the Dodd–Frank Wall Street Reform and Consumer Protection Act?
The Dodd–Frank Wall Street Reform and Consumer Protection Act is a US law that was enacted in response to the financial crisis of 2007-2008. It is a comprehensive reform of the financial industry that aims to increase transparency, reduce risk, and protect consumers.
The Dodd–Frank Act has numerous provisions that affect a wide range of financial institutions and activities. Some of the key provisions include:
- The creation of the Consumer Financial Protection Bureau (CFPB), which is an independent agency that is responsible for protecting consumers from financial fraud and abuse.
- The establishment of new rules for the mortgage industry, including requirements for lenders to verify a borrower's ability to repay a loan and to disclose more information about the terms of the loan.
- The introduction of new capital and liquidity requirements for banks, which are intended to make them more resilient in times of financial stress.
- The implementation of new rules for the derivatives market, which are designed to increase transparency and reduce risk.
- The creation of the Financial Stability Oversight Council (FSOC), which is responsible for identifying and addressing potential risks to the financial system.
The Dodd–Frank Act is designed to make the financial industry more stable and accountable, and to protect consumers from financial abuse.