The Dodd-Frank Wall Street Reform – legal act of USA, which was applied on 21 July 2010 in order to reduce financial systems risks. It is considered the most large-scale change in the US financial regulation since the Great Depression. The law significantly changed the activity of federal authorities, governing the provision of financial services, as well as created an additional financial regulatory body - the Financial Stability Oversight Council (Financial Stability Oversight Council, FSOC).
The Dodd-Frank Act contains a large quantity of different rules. Some of these rules are issued jointly by several agencies and lack integrity, so there is some overlap and duplication. Dodd-Frank Act does not require all agencies to consult and coordinate between each other. Another issue is that final rules are coordinated between agencies, however, Dodd-Frank Act usually miss policies and procedures to govern activities (United States Accountability Office).
The drawback of the Dodd-Frank is its complexity. The businesses and financial institutions are overwhelmed with challenges of understanding nuances of this law. So, the work should be done to make this act more understandable and straightforward. Also the law regulates only huge financial market players and neglects others. However, the situation can change quickly and the institution, which has small turnovers now, can suddenly become huge tomorrow and influence dramatically economic situation. The regulations should be applied not only to large institutions, but also to small and medium ones.
The Consumer Financial Protection Bureau (CFPB) is an agency, which is responsible for protecting consumers in financial sectors. In my opinion, it should not be abandoned, because for democratic country it is important to protect ordinary citizens from financial crisis.
References
United States Accountability Office, 2011. Dodd-Frank Act Regulations: Implementation Could Benefit from Additional Analysis and Regulations. Retrieved from: http://www.gao.gov/new.items/d12151.pdf
