1. Understanding the Dodd-Frank Act 

2. The Economic Growth, Regulatory Relief, and Consumer Protection Act 

3. Review of the Dodd-Frank Act 

Understanding the Dodd-Frank Act 

The Dodd-Frank Wall Street Reform and Consumer Protection Act is a massive piece of financial reform legislation that was passed in 2010, during the Obama administration. Generally known as the Dodd-Frank Act, or Dodd-Frank, it established several new government agencies assigned to overseeing the colourful factors of the law and, by extension, colorful aspects of the fiscal system.  The 2007 – 2008 fiscal extremity is maybe the worst profitable catastrophe to transpire in the country (and the world) since the Wall Street crash in 1929. Astronomically speaking, it was caused by rapacity-driven geste and lax oversight of financial institutions.  The loosening of fiscal assiduity regulations in the decades leading up to 2007 allowed colorful types of institutions in theU.S.  fiscal Services assiduity to advance plutocrats in ways that were more unsafe than ever ahead. The casing sector in particular educated massive growth that could not be supported.  The bubble burst, transferring the banking assiduity and global stock requests into a downfall. It created the worst global recession in generations.  Dodd-Frank was created to keep anything analogous from ever passing again. 

The Economic Growth, Regulatory Relief, and Consumer Protection Act 

When Donald Trump was tagged chairman in 2016, he pledged to repeal Dodd-Frank. Siding with critics, the U.S.  It was inked into law by also- President Trump on May 24, 2018. These are some of the vittles’ of that law and some of the areas in which former norms were loosened 

  • The new law eased the Dodd-Frank regulations for small and indigenous banks by adding the asset threshold for the operation of prudential norms, stress test conditions, and obligatory threat panels. 
  • The new law exempted escrow conditions for domestic mortgage loans held by a depository institution or credit union under certain conditions. It also directed the Federal Housing Finance Agency (FHFA) to set up norms for Freddie Mac and Fannie Mae to consider indispensable credit scoring styles.
  • The law exempted lenders with means of lower than $10 billion from conditions of the Volcker Rule and assessed less strict reporting and capital morals on small lenders. 
  • The law needed that the three major credit reporting agencies allow consumers to indurate their credit lines free of charge as a way of inhibiting fraud.

After Joseph Biden was tagged chairman in 2020, the CFPB concentrated on rescinding rules from the Trump period that were in direct conflict with the duty of the CFPB.  In June 2021, President Biden, along with the U.S. Department of Education and support from the CFPB, blazoned plans to cancel further than $500 million of pupil loan debt, which remains the subject of ongoing action. The CFPB has strengthened its oversight of for-profit sodalities to tamp down on raptorial pupil loan practices.  The Biden administration has also blazoned its intent to re-establish rules against other forms of raptorial lending, similar to payday loans. 

Review of the Dodd-Frank Act 

Proponents of Dodd-Frank believed that the law would help the frugality from passing an extremity like that of 2007 – 2008 and cover consumers from numerous of the abuses that contributed to the extremity.  Detractors, still, have argued that the law could harm the competitiveness of U.S.  enterprises relative to their foreign counterparts. In particular, they contend that its nonsupervisory compliance conditions

overly burden community banks and lower fiscal institutions, even though they played no part in causing the fiscal extremity.  Similar fiscal world lights as former Treasury Secretary Larry Summers, Blackstone Group L.P.(BX) CEO Stephen Schwarzman, activist Carl Icahn, and JPMorgan Chase &Co. (JPM) CEO Jamie Dimon also argue that, while each institution is safer due to the capital constraints assessed by Dodd-Frank, the constraints make for a further illiquid request overall.  The lack of liquidity can be especially potent in the bond request, where all securities aren’t marked to request and numerous bonds warrant a constant force of buyers and merchandisers. The advanced reserve conditions under Dodd-Frank mean that banks must keep an advanced chance of their means in cash. This decreases the amount that they’re suitable to hold in marketable securities.  In effect, this limits the bond request- making a part that banks have traditionally accepted. With banks unfit to play the part of a request maker, prospective buyers are likely to have a harder time chancing neutralizing merchandiser. More importantly, prospective merchandisers may find it more delicate to find neutralizing buyers.