Preview

Dodd Frank Act

Better Essays
Open Document
Open Document
2542 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Dodd Frank Act
The Dodd-Frank Act

By William Pope

11/26/12
Dr.Boulet
History of Economic Thought

Since the financial crisis of 2008 many things have changed in the ways of how our government works, the way people run a business, and even the way people live their lives. Although some people may blame these events on former President George W. Bush or current President Barack Obama, much of the changes that have occurred have been from a single act, the Dodd-Frank Act. The Dodd-Frank Act, which was implemented after the financial crisis that occurred in 2008, is designed to keep businesses and firms honest. The Dodd-Frank Act implements changes that affect the oversight and supervision of financial institutions, provides a new resolution procedure for large financial firms, creates new government agencies responsible for implementing and enforcing compliance procedures with consumer financial laws, introduces more stringent regulatory capital requirements, effects significant changes in the regulation of over the counter derivatives, reforms the regulation of credit rating agencies, implements changes to corporate governance and executive compensation practices, incorporates the Volcker Rule, requires registration of advisers to certain private funds, and effects significant changes in the securitization market. This is just a few of the things that this Act covers. Although the legislation calls for multiple studies to be conducted and specific rule making be made, we all are somewhat acquainted with the Dodd-Frank Act. The first thing that one may need to know about this act is that numerous government agencies are responsible for regulating financial institutions. People have noted that without a governing body to oversee the various agencies we will remain vulnerable to regulatory gaps and oversight failures. The Dodd-Frank Act created the Financial Stability Oversight Council, which oversees all financial institutions. The Financial Stability Oversight

You May Also Find These Documents Helpful

  • Good Essays

    The Sarbanes-Oxley Act (SOX) originated on July 29, 2002 due to fraudulent bookkeeping practices and misleading financial reports from large corporations. These practices created a number of accounting scandals, which resulted in this in the government creating such an act. The purpose was to prevent and punish corporate corruption and, along the way, try to repair investor confidence. The law was passed by congress after well-known companies (Enron, Peregrine Systems and Tyco International, to name a few) caused great humiliations to its investors, which in result cost them billions of dollars. The share prices of the affected companies collapsed, which shook public confidence in the nation’s securities markets.…

    • 433 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    The Dodd-Frank Legislation also known as the Dodd-Frank Wall Street reform and consumer protection act or the Dodd-Frank Act. The Dodd-Frank Act was introduced in the House of Representatives by Financial Services Committee Chairman Barney Frank, and by the Senate Banking Committee former Chairman Chris Dodd and there for named after the two men. The Dodd-Frank represents the most comprehensive financial regulatory reform measures taken since the Great Depression; in simplest terms the Dodd-Frank Act is a law that places major regulations on the financial industry. Dodd-Frank grew out of the Great Recession with the intention of preventing another collapse of major financial institutions in the U.S. The Dodd-Frank also enforces the consumer protect act which is put in place to protect barrowers from abusive barrowing and puts regulations on banks that practice these bad habits.…

    • 1640 Words
    • 5 Pages
    Powerful Essays
  • Satisfactory Essays

    LAW 421 Week 5

    • 453 Words
    • 2 Pages

    Changes in regulation often are more of a benefit to corporations than they are to customers and it has been that way for many years. Corporate deregulation has changed over and over because different Presidents in office. Because of this, some laws have been altered or eliminated so that deregulation could override government regulation. Deregulation relaxes laws so that the industry can self-regulate on the principle that it should be allowed to without government support or sanction. The devastation of Enron, WorldCom and the sub-prime market caused the passing of the Sarbanes-Oxley Act by Congress.…

    • 453 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Sarbanes-Oxley Act

    • 558 Words
    • 3 Pages

    The Sarbanes-Oxley Act of 2002 (often shortened to SOX) is legislation enacted in response to the highprofile Enron and WorldCom financial scandals to protect shareholders and the general public from accounting errors and fraudulent practices in the enterprise. The act is administered by the Securities and Exchange Commission (SEC), which sets deadlines for compliance and publishes rules on requirements. Sarbanes-Oxley is not a set of business practices and does not specify how a business should store records; rather, it defines which records are to be stored and for how long. The legislation not only affects the financial side of corporations, it also affects the IT departments whose job it is to store a corporation's electronic records. The Sarbanes-Oxley Act states that all business records, including electronic records and electronic messages, must be saved for "not less than five years." The consequences for non-compliance are fines, imprisonment, or both. IT departments are increasingly faced with the challenge of creating and maintaining a corporate records archive in a cost-effective fashion that satisfies the requirements put forth by the legislation. FAQ: What is the impact of Sarbanes-Oxley on IT operations? The following sections of Sarbanes-Oxley contain the three rules that affect the management of electronic records. The first rule deals with destruction, alteration, or falsification of records.…

    • 558 Words
    • 3 Pages
    Satisfactory Essays
  • Satisfactory Essays

    The Dodd-Frank Reform

    • 348 Words
    • 2 Pages

    The Dodd-Frank Reform was passed in 2010. The purpose of this legislation is to change risky lending practices. One of the causes of the 2007 financial crisis was the high volume of high risk loans that were being bought and sold by financial institutions. The Dodd-Frank Reform would prevent financial institutions from issuing predatory and high risk loans.…

    • 348 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    In any society there will be people that will do anything to succeed in life which includes breaking the law or even finding loop holes within laws. Now the Sarbanes-Oxley Act is a federal law to try and protect shareholders and the general public from fraudulent practices but in the end it is just a law and all laws can be broken. Some critics have pointed out the “Madoff scandal as a prime example of how the Sarbanes-Oxley Act has failed” (Fuller, 2009). But just because a system fails doesn 't mean you give up or stop it means that you need to perfect the system. So where does the government go from here? Do they make more laws or add more…

    • 373 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Sarbanes-Oxley Act

    • 504 Words
    • 3 Pages

    The Sarbanes-Oxley Act of 2002 is an act passed by U.S. Congress in 2002 to protect investors and the general public from the possibility of fraudulent accounting activities by corporations. The Sarbanes-Oxley Act authorized strict modifications to improve financial disclosures from corporations and to prevent accounting fraud. This law was passed after a couple of big the accounting scandals like Enron, Tyco, and WorldCom shook investor assurance in financial statements and required an overhaul of regulatory standards. The act is administered by the Securities and Exchange Commission, which sets deadlines for compliance and publishes rules on requirements. It is not a set of business practices and does not specify how a business should store records; rather it tells more which records are to be stored and for how long in case of hearings.…

    • 504 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    The Dodd-Frank Wall Street Reform and Consumer Protection Act, was passed in 2010. This was the most dramatic change to banking regulations since the Great Depression. This act established a whistleblower protection program. The Dodd-Frank act provides financial incentives and employment protection for individuals who report federal securities fraud.…

    • 365 Words
    • 2 Pages
    Good Essays
  • Better Essays

    The Sarbanes-Oxley Act

    • 2083 Words
    • 9 Pages

    Chapter 5: the Sarbanes- Oxley act of 2002 involved the public anger that started when Enron, WorldCom, and other big companies scandals. This is when there was support for white collar crime when it came to accounting standards. Under the law of federal sentencing rules to make sure that white collar criminals are being punished. (Barnes, 2012). 1. For someone to alter or get rid of documents and there intensions to obstruct or effect the crime/case. 2. The CEO (chief executive officer) and the CFO (chief financial officer) must clarify that repots have been submitted to the SEC (securities and exchange commission.) it is a crime if the CEO and CFO make a report that is false. 3 CEO and CFO must reimburse the company for any raises and if…

    • 2083 Words
    • 9 Pages
    Better Essays
  • Good Essays

    Legal Issues

    • 809 Words
    • 4 Pages

    The Securities and Exchange Commission is the agency. I am interested in this regulation because of the amendment that was done to regulation AB Bank of America had to expand its mortgage-servicing department and I in turn have a new job. This amendment has affected my company as well as provided me an opportunity to excel in my career. The amendment has in greater detail changed the way that banks report and reconcile transactions of asset backed securities. I now work for our Investor asset management sector specifically responsible for auditing the mortgage servicing transactions that come through from our sub-servicers to our investors of those mortgages.…

    • 809 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Fdic

    • 443 Words
    • 2 Pages

    The federal deposit insurance corporation or FDIC was founded in 1933 in response to the failure of various banks in the 1920’s and early 1930’s. The FDIC was founded after the failure of many banks due to people trying to remove all their money from their bank as a result of the great depression. This posed a problem because the banks have given out loans and did not have enough money to payout all of the money that was deposited. When everyone tried to get their money out of the banks it was a first come first serve basis and not everyone was able to get their money. When the citizens of the United States heard about this it caused panic nationwide and caused the failure of thousands of banks. The government addressed this issue by forming the FDIC and insuring any money deposited in the banks up to $2500 and later in 1934 was raised to $5000. This helped people put more trust in banks knowing that their money was insured by the government. This government program is still in effect and insures millions of banks nationwide and protects depositors for up to $250,000.…

    • 443 Words
    • 2 Pages
    Good Essays
  • Powerful Essays

    The Dodd-Frank Act

    • 1636 Words
    • 7 Pages

    This topic of discussion focuses on the Dodd-Frank Act and how it came into existence? Those who were affected by the law, to include the Acts forced regulations on all U.S. financial institutions, private hedge funds, government controlling, compliances, and its protection. The Dodd-Frank Wall Street Reform and Consumer Protection Act, now called The Dodd-Frank Act is a U.S. federal mandated law, one in which was created by the Obama administration and signed into federal law on July 21, 2010. The Act was implemented partly due to the financial crisis of 2008. According to USA government “The Act was created to place regulations on the financial industry that government controls.” The agency created was the Financial Stability Oversight Council,…

    • 1636 Words
    • 7 Pages
    Powerful Essays
  • Good Essays

    He likewise marked a few bits of deregulatory keeping money enactment. The purpose was to streamline and overhaul a framework that had been set up following the Great Depression, and also extricate credit to empower speculation. However, numerous commentators propose that this project, including procurements that urged banks to offer home loans to higher-hazard borrowers, made a domain that prompted the budgetary emergency of 2008.…

    • 977 Words
    • 4 Pages
    Good Essays
  • Better Essays

    However, people challenge this based on their own beliefs about debt and spending habits. (Gottfried Haberler, 1976) Some more critical measures were regulations on financial institutions and markets, they created the Dobbs-Frank Act to impose a much stronger and stricter direction on financial entities and market stability. New agencies are watching over them to protect people from making bad practice decisions. One big part of the Dobbs-Frank Act is that it limits banks from making risky trades with their own money.…

    • 1219 Words
    • 5 Pages
    Better Essays
  • Best Essays

    Government Regulation

    • 2796 Words
    • 12 Pages

    Government regulation is around us everywhere. The government needs to make sure that the public’s interests are maintained and preserved. Being an accounting student, I have heard and read about regulation in the accounting industry numerous times. There have been many major accounting scandals in history that have lead to many different kinds of government regulation. The government regulations in accounting are mostly enacted to protect investors. From 2000 to 2002 there was an abundant number of large corporate accounting frauds, which led to the Sarbanes-Oxley Act of 2002. Previous regulations were efficient to a certain extent, but scandals still happened and more regulation seemed to always be needed. Even though the new SOX regulation seems powerful and efficient, I believe that there will always be a need for additional regulation in order to prevent future scandals.…

    • 2796 Words
    • 12 Pages
    Best Essays