Consumer Protection Provisions of the Dodd-Frank Act

Banking professionals and attorneys must keep themselves informed regarding the varying aspects of the financial industry, especially when it comes to consumer protection provisions. These regulations and guidelines are in place to ensure that customers and patrons receive due diligence in all financial operations.

The Dodd Frank Act was first passed into law in June 2009, but the bill underwent heavy revision until its current form was approved in December 2009. The legislation is named after the two members of Congress, Barney Frank (D-MA) and Chris Dodd (D-CT), who were instrumental in the drafting and proposal of the Act.

The official mission statement of the Dodd Frank Act reads "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."

The bill is divided up into 16 Titles, which are listed below in chronological order:

Title I – Financial Stability

Title II – Orderly Liquidation Authority

Title III – Transfer of Powers to the Comptroller, the FDIC, and the Fed

Title IV – Regulation of Advisers to Hedge Funds and Others

Title V – Insurance

Title VI – Improvements to Regulation

Title VII – Wall Street Transparency and Accountability

Title VIII – Payment, Clearing and Settlement Supervision

Title IX – Investor Protections and Improvements to the Regulation of Securities

Title X – Bureau of Consumer Financial Protection

Title XI – Federal Reserve System Provisions

Title XII – Improving Access to Mainstream Financial Institutions

Title XIII – Pay It Back Act

Title XIV – Mortgage Reform and Anti-Predatory Lending Act

Title XV – Miscellaneous Provisions

Title XVI – Section 1256 Contracts

Out of these, the most important are the first two. The first title established the Financial Stability Oversight Council, which has ten voting members who are meant to uphold the stability of the United States' financial market. This council supervises all major banks and lending authorities. The orderly liquidation authority is slightly different, because any company that is not a member of the Securities Investor Protection Corporation (SIPC) can be liquidated at the behest of the federal government.

Finally, the last provisions are relatively self-explanatory, but the nuts and bolts of the law can be discovered upon thorough examination of the text.

Related Information