Running Head: CHANGES TO THE DODD-FRANK ACT
Changes to the Dodd-Frank Act.
CHANGES TO THE DODD-FRANK ACT
The Dodd-Frank Wall Street Reform and Consumer Protection Act was enacted in July
21st, 2010 to overhaul the United States’ financial regulatory system as mitigation against
another possible financial crisis as that which was witnessed between 2007 and 2008. The law
made changes to the role of federal financial regulatory bodies as well as the obligations of the
United States financial service sector. President Barack Obama was responding to the call to
initiate reforms in the country’s ailing financial sector. After its implementation, the law
reorganized the financial regulatory system of the United States by eliminating the Thrift
Supervision Office and giving the Federal Deposit Insurance Corporation more responsibility.
Concerning Dodd-Frank, the particular issue that is causing the most pain is the fact that
many financial institutions are against some portions of the Act and the Republican Congress
believe that the Act should be repealed. Conversely, Dodd-Frank has since been watered down
by the current administration through numerous changes I of the law. There is, therefore, a major
concern over the future of the law. However, it seems obvious that the way to fix the current
version of the law is to protect the consumer of the financial sector from financial misconduct,
fraud, and abuse attributed to all forms of financial products, mortgages, and credit cards.
The rollback of the Act
By February 2017, there was a public debate on whether to make changes on the law
with many Republicans calling for either a total or partial repeal of the law. By June 9th, 2017,
the Republicans through the influence of President Trump called for the change of the law
through the enactment of the Financial Choice Act (New York Times (nd). This legislation made
significant changes to the very critical provision of the Dodd-frank Act after it was passed by
233 legislatures against 188 who opposed the bill. Another significant change to the Dodd-Frank
CHANGES TO THE DODD-FRANK ACT
Act was brought about by the enactment of the Economic Growth, Consumer Protection,
Regulatory, and Relief Act that made it optional for U.S banks and other financial institution to
comply with the Dodd-Frank Act. After its passage by the House of Representatives on Mya
22nd 2018, President Trump signed the bill and it became operational as a law that brought partial
repel to the Dodd-Frank Act (Helmore, 2018).
The original Act had 16 titles requiring regulators to enact 243 regulations, undertake 67
studies and provide 22 reports periodically. The objective of this Act was to improve
transparency and accountability in among U.S financial institutions, thereby promoting the
financial stability of the country (Helmore, 2018). It also aimed at protecting the consumers of
financial services and products from the financial institutions who had engaged in abusive and
fraudulent practices to exploit their customers.
Implications of the Rollback of the Act
The partial repeal of the Dodd-Frank Wall Street Reform and Consumer Protection Act
established powers and transferred powers to facilitate the regulatory framework of the country’s
financial sector. Among the major institution that has been affected by the changes in the Act is
the Federal Deposit Insurance Corporation whose role of monitoring financial systems has been
altered (Rappeport & Flitter, 2018). The Securities and Exchange Commission of the U.S (SEC)
has also been given new powers transferred from other agencies while the Comptroller of the
Currency has been given new mandate in overseeing the country’s financial regulatory system.
The Federal Reserve (Fed) has been allocated additional roles while the Securities
Investor Protection Corporation (SIPC). A significant change in the law is the ...
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