Dodd-Frank Act

The Dodd-Frank Wall Street Reform and Consumer Protection Act is a law first enacted in the United States following the 2008 financial crisis. Dodd-Frank expanded stockholder voting privileges, disclosure requirements for the identity of compensation consultants, and introduced special rules for financial institutions.

Passed in 2010, the Dodd-Frank Act imposed a substantial regulatory burden on financial institutions in the U.S. The Act also established the Consumer Financial Protection Bureau, which was designed to protect consumers from predatory and subprime lending. Notably, the Volcker Rule restricted the type of entities banks could conduct business to minimize risk and potential conflicts of interest. Moreover, the Act created the Securities and Exchange Commission’s Office of Credit Ratings and enhanced the outdated whistleblower programs from the Sarbanes-Oxley Act.

The Trump Administration altered portions of the Dodd-Frank Act via the Economic Growth, Regulatory Relief, and Consumer Protection Act. That update reduced capital requirements, leverage ratios, escrow requirements for home mortgages, and reporting requirements.