Frank Dodd Act – Pros and Cons

by Dori Tery on August 7, 2013

Frank Dodd Act to promote the financial stability

Frank Dodd Act is normally known as the Dodd Frank Wall Street Reform and consumer Protection Act and it was signed by the president Barack Obama on July 21, 2010. This act is being promoted to bring the financial stability and to improve the accountability in the financial system with transparency. It even helps the American taxpayers by ending the bailouts. So as to protect consumers from the financial service practices and also for other purposes.

This act has brought the significant changes in the financial regulation of the United States. But the Frank Dodd Act was attacked by various critics and due to this it was difficult to prevent another financial crisis. This act has made changes in the financial regulations of the United States which has affected the federal financial agencies and also almost every part of the country in which financial service is included. This law was first proposed by the Obama administration at the time when the white house sent a series of proposed bills to Congress and then a version of this was introduced in the house in July 2009.

Origin of the Frank Dodd Act

From 2007-2010 there was a financial crisis and this led to changes in the regulatory system. Then president Obama introduced a proposal of sweeping the overhaul financial regulatory system of the United States and the transformation was not seen as there was a Great Depression. Then the bill was finalized and emerged in the conference and also stated that it included ninety percent of the proposals. Then a version of this was introduced in July 2009 and again a revised version was introduced in the House of Representatives by the financial committee chairman Barney Frank and by the banking committee chairman Chris Dodd.

Components of the proposal

It was clearly said that there should be elimination of the national thrift charter and a new oversight should be brought in to reduce the systemic risk. Even the consumer protection reforms should include the new consumer protection agency and also should maintain the uniform standards as well as for strengthened investor protection. Then only Dodd frank Act can well fully run and achieve his goal.

Response of the Frank Dodd Act

The Frank Dodd Act was largely consistent but also have to add some additional provisions and has to implementation in order to be consistent. The Volcker Rule was also included in Obama’s proposal which prohibits the depository banks and helps the proprietary trading and this rule was passed in the Senate bill and then the conference committee started the rule in weakened form under section 619 of the bill.

frank dodd actThe Frank Dodd Act is normally categorized in sixteen titles and it is only under one law count. It even requires and also regulates two hundred forty three rules and conduct sixty seven studies and also state twenty two periodic reports. The main aim of the Frank Dodd Act is to promote the stability of the United States and this act also helps to change the existing regulatory structure which is creating a host of new agencies.

 

 

Watch the Video – Frank Dodd Act Summary

Watch the Video – Frank Dodd Act Wiki

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