Dodd-Frank Act | CFTC (2024)

FAQs

What does the Dodd-Frank Act do? ›

The most far reaching Wall Street reform in history, Dodd-Frank will prevent the excessive risk-taking that led to the financial crisis. The law also provides common-sense protections for American families, creating new consumer watchdog to prevent mortgage companies and pay-day lenders from exploiting consumers.

Its provisions restricted banks from trading with their own funds (the “Volcker Rule”), heightened monitoring of systemic risk, tightened regulation of financial products, and introduced consumer protection initiatives.

Section 165(i)(2) of the Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank Act") requires certain national banks and federal savings associations to conduct company-run stress tests.

The 2010 Dodd-Frank Act, named after former Senators Chris Dodd and Barney Frank, affects how and to whom banks lend money. It was put into place after the 2008 mortgage meltdown. Its purpose: to protect consumers from taking out mortgages that are beyond their means to pay the loan.

1 Banks have the authority to take control of any capital that fits the criteria per the law. Investors with accounts that exceed the $250,000 insured limit may be affected and should: Monitor the performance of the financial markets and financial sector.

Dodd-Frank was intended to curb the extremely risky financial industry activities that led to the financial crisis of 2007–2008. Its goal was, and still is, to protect consumers and taxpayers from egregious practices like predatory lending.

Dodd Frank only applies to residential mortgage transactions secured by a dwelling. It does not apply to transactions involving commercial property, vacant land or investment property.

The DF Protocols allow swap market participants to simultaneously amend multiple ISDA Master Agreements and other swap documentation using an online tool known as “ISDA Amend” which is supported by Markit®, a vendor platform.

Specifically, the Dodd-Frank Act initially provided for the following tiers of civil money penalties: For any violation of a law, rule, or final order or condition imposed in writing by the CFPB, a civil money penalty of up to $5,000 for each day during which such violation or failure to pay continues.

Violations of the FCRA may also be considered as a FTC UDAP or Dodd- Frank UDAAP. For example, obtaining and using unsolicited medical information (outside of the exceptions provided by the rule) to make credit decisions may also be considered as unfair.

What banks are exempt from Dodd-Frank? ›

Banks with less than $10 billion in assets that have total trading assets and trading liabilities accounting for 5% or less of total assets, and affiliates of such banks, will be exempt from the Volcker Rule, significantly reducing their compliance burdens.

Dodd Frank does not regulate purchase money financing for the sale of lots (even if single-family residential lots), commercial properties, investment properties such as duplexes, rental properties or other income producing properties.

Simple principles like. . . . Markets should be transparent. Regulation should be consistent, without gaps that can be exploited by those who wish to indulge in risky, destabilizing or illegal behavior. Market participants, not taxpayers, should bear the risks of their market activities.

General prohibition against banks and their affiliates owning equity interests in hedge funds and private equity funds. Authorization of interest-bearing transaction accounts. Creation of a Federal Insurance Office. Review of federal emergency loans by the Government Accountability Office.

To promote the financial stability of the United States by improving accountability and transparency in the financial system, to end ''too big to fail'', to protect the American taxpayer by ending bailouts, to protect consumers from abusive financial services practices, and for other purposes.

Consumer​ protection, resolution​ authority, systemic risk​ regulation, Volcker​ rule, and derivatives.