Dodd-Frank Wall Street reform act was the result of the catastrophic crash of US economy due to lack of oversight on Wall Street and big banks who were playing games with the mortgages. This reform act is intended to create a sound economic foundation to grow jobs, protect consumes and rein in Wall Street big bonuses, end bail outs and prevent another financial crisis.
Years without accountability for Wall Street and big banks brought us the worst financial crisis since the Great Depression, the loss of 10 million jobs, failed businesses, a drop in housing prices, and wiped out personal savings.
The failures that led to this crisis require bold action. We must restore responsibility and accountability in our financial system to give Americans confidence that there is a system in place that works for and protects them. We must create a sound foundation to grow the economy and create jobs.
HIGHLIGHTS OF THE LEGISLATION
1) Independent Consumer Protections: Creates a new independent watchdog with the authority to ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, and other financial products, and protect them from hidden fees, abusive terms, and deceptive practices. This agency is now called Consumer Federal Protection Bureau which was originally headed by now Senator Elizabeth Warren of Massachusetts.
2) Ends Too Big to Fail Bailouts: Dodd-Frank Wall Street reform law ends the possibility that taxpayers bailouts of big banks despite the threat to the economy by creating a safe way to liquidate failed financial firms and imposing tough new capital and leverage requirements. The law also changes the Fed’s authority to allow system-wide support but no longer prop up individual firms. Dodd-Frank reform law also establishes rigorous standards and supervision to protect the economy and American consumers, investors and businesses.
3) Advance Warning System: This law also creates a council to identify and address systemic risks posed by complex and large multi-national companies and their activities before they threaten the stability of the economy.
4) Investor Protection: Provides tough new rules for transparency and
accountability for credit rating agencies to protect investors and businesses.
5) Wall Street Transparency & Accountability : Dodd-Frank Wall Street reform act eliminates loopholes that allow risky and abusive practices that went unnoticed prior to the collapse of the economy in 2006. The lack of oversight included loopholes for over-the-counter derivatives, asset backed securities, hedge funds, mortgage brokers and payday lenders. The law also attempts to address the Executive Compensation and Corporate Governance; providing shareholders with a say on pay and corporate affairs with a non-binding vote on executive compensation and golden parachutes.
6) Enforces Regulations on the Books: Strengthens oversight and empowers regulators to aggressively pursue financial fraud, conflicts of interest and manipulation of the system that benefits.
We doubt that any legislation can keep up with the innovative thinkers on Wall Street who are trying daily to beat the system. What do you think?