Dodd-Frank

The Dodd–Frank Wall Street Reform and Consumer Protection Act (Pub.L. 111–203, H.R. 4173; commonly referred to as Dodd–Frank) was signed into federal law by President Barack Obama on July 21, 2010. Passed as a response to the Great Recession, it brought the most significant changes to financial regulation in the United States since the regulatory reform that followed the Great Depression. It made changes in the American financial regulatory environment that affect all federal financial regulatory agencies and almost every part of the nation's financial services industry. As with other major financial reforms, a variety of critics have attacked the law, with some arguing it was insufficient to prevent another financial crisis (or more bailouts) and others contending it went too far and unduly restricted financial institutions. President-Elect Donald Trump's transition team has vowed to dismantle the Dodd–Frank act.

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What’s in the Financial Choice Act

6/13/17

from The Wall Street Journal,

6/8/17:

Here are key details of the Republican bill to overhaul Wall Street that has passed the House.

The House on Thursday passed the Financial Choice Act, which aims to revamp the rules the financial-services industry has to follow. The move marks the first time Republicans have passed broad legislation aimed at replacing the 2010 Dodd-Frank financial-overhaul law, the Obama -era response to the financial crisis.

The legislation is unlikely to become law as it isn’t expected to earn enough support in the Senate, though aspects of the bill could be implemented by the Trump administration. Here are key details of what the bill proposes to do: • Grant healthy banks significant regulatory relief, such as exemptions from stress tests, so long as the bank maintains a minimum leverage ratio of at least 10%. That means they must fund every $100 of loans or investments with at least $10 of equity raised from investors, as opposed to borrowed money such as deposits.

Subject banks to stress tests every other year instead of every year. • Increase the possible penalties for wrongdoing in financial markets. • Require financial regulators to do a cost-benefit analysis of new rules, and prevent them from issuing rules that don’t pass that test. • Strip the Consumer Financial Protection Bureau of its powers to write rules and supervise firms.

Repeal the Volcker rule, a Dodd-Frank provision restricting taxpayer-insured banks from certain types of trading. • Repeal a Dodd-Frank provision allowing the government to take over a failing financial firm, known as orderly liquidation authority, and create new rules for such firms to go through bankruptcy instead. • Remove the Dodd-Frank authority of regulators to designate large nonbank financial firms, such as insurers or asset managers, as “systemically important financial institutions” subject to stricter rules. • Allow all companies to communicate confidentially with the Securities and Exchange Commission about potential initial public offerings and withhold company communications with regulators from investors. • Prohibit the SEC from completing a rule aimed at giving activist investors more firepower to defeat company board candidates. • Give outsiders more input on the SEC’s enforcement priorities and strategies by requiring the agency to create an advisory committee to “offer recommended reforms.” • Abolish the Office of Financial Research, an agency created by Dodd-Frank to monitor the financial system. • Modify capital rules to give banks more flexibility in how they guard against “operational risks” such as big-ticket legal liabilities.

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What’s in the Financial Choice Act