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The Resource for the Global Finance Profession

Pop Quiz: Regulators meet to give Congress a Dodd-Frank progress report

  • By Jeanine H. Arnett
  • Published: 2010-11-16

<p>Regulators were called to Capitol Hill on Sept. 30 to deliver a progress report relating to their agencies' implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. Senate Banking Committee members heard statements from the heads of the Federal Reserve, Federal Deposit Insurance Corp., Securities and Exchange Commission, Commodity Futures Trading Commission, and the Department of the Treasury and asked questions about their rulemaking plans in the coming months. The regulators used this platform to outline their progress to date and give lawmakers a preview of the steps being taken to ensure that the financial regulatory overhaul law is enacted in a manner that is expedient and efficient. </p> <p>The new law will lead to the most dramatic reshaping of the U.S. financial markets since Depression-era reforms enacted more than 70 years ago, and there are a number of areas that will directly impact corporate financial professionals. They include:</p> <ul class="ShowBullet"> <li>Reforms to the over-the-counter derivatives market</li> <li>New requirements on, and tighter oversight of, credit rating agencies</li> <li>Permanent increases to FDIC insurance coverage to $250,000, retroactive to January 1, 2008</li> <li>Payment of interest on business checking accounts by repealing Regulation Q</li> <li>New rules governing interchange fees on debit cards.</li> </ul> <p>During the hearing regulators said their agencies spent most of the summer working on proposed rules and have already begun to published. The SEC, which oversees credit rating agencies and shares rulemaking authority with the CFTC over derivatives, has identified at least 38 rules that it plans to propose or adopt before the end of the year, with additional rules expected in early 2011. </p> <p>Similarly, the CFTC reported that it has begun considering rules that will guide the oversight of derivatives, and that agency has identified 30 areas where additional rules will likely be necessary. In August and September, the agency issued several Advance Notices of Proposed Rulemaking and to date has received many public comments. It is clear that parties impacted by the law want the opportunity to weigh in and provide their perspectives on the proposed rules. </p> <p>In addition to the work that the CFTC and SEC are doing, the FDIC has begun issuing proposed rules, and it approved a rule to implement provisions of Dodd-Frank to provide unlimited deposit insurance coverage on noninterest-bearing transaction accounts beginning on Dec. 31, 2010 through Dec. 31, 2012. The mandatory change applies to all FDIC-insured institutions and carries no special assessments for the program. </p> <p>Federal Reserve Chairman Ben Bernanke discussed the efforts his agency is currently carrying out as it was charged with establishing the new Financial Stability Oversight Council (FSOC). The FSOC will hold its very first meeting on Friday, Oct. 1. Additionally, Fed staff are working on drafting rules relating to capital and liquidity requirements for banks, enforcing restrictions on interchange fees for debit cards, and implementing the Volker Rule which restricts proprietary trading and private fund activities of banking firms. </p> <p>AFP will monitor forthcoming rule proposals that will be required to implement many sections of the Dodd-Frank Act to ensure that the interests and concerns of finance professionals are considered. If you have questions or concerns regarding the Act, or would like more information, please contact Jeanine Arnett, AFP's Director of Government Relations &amp; Public Policy, or visit AFP's Legislative and Regulatory Status Update.</p>

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