Today, President Obama signed into law the “Dodd-Frank Wall Street Reform and Consumer Protection Act” (the “Dodd-Frank Act”). The House of Representatives and the Senate had approved the Conference Report of this legislation on June 30 and July 15, respectively.
This historic legislation is, however, merely the end of the first phase of the effort to modernize our financial regulatory system. The Dodd-Frank Act directs a number of Federal agencies, including the U.S. Securities and Exchange Commission (SEC), the Federal Reserve Board of Governors (Federal Reserve), the Commodity Futures Trading Commission (CFTC) and the Federal Trade Commission (FTC), to undertake significant rulemakings to effectuate the goals of the legislation.
Among a number of important provisions, the legislation establishes a new independent Consumer Financial Protection Bureau within the Federal Reserve to regulate the mortgage industry, credit cards and other financial products; creates a new Financial Stability Oversight Council to identify and address systemic risks posed by large, complex companies, products and activities before they threaten the stability of the economy; and establishes new regulations for the over-the-counter derivatives markets.