More than 2,300 pages long, the Dodd-Frank bill is intended to address the myriad of problems believed to have caused the financial crisis.
The Mortgage Bankers Association worked with lawmakers on issues impacting the real estate finance industry and has provided a summary report of the Dodd-Frank bill, highlighting areas of interest to our community.
Below is an overview of key provisions in the Bill, extracted from the MBA report. Click here for full report with expanded summaries of provisions of particular interest to mortgage banking.
The bill would:
- Establish Financial Stability Oversight Council to address systemic risks;
- Provide liquidation authority to permit orderly liquidation of systemically risky companies;
- Revise bank and bank holding company regulatory regime by transferring Office of Thrift Supervision functions to Office of Comptroller of Currency (OCC) and clarifying regulatory functions of Federal Deposit Insurance Corporation (FDIC) and Board of Governors of Federal Reserve (FRB);
- Establish regulation of investment advisers to hedge funds;
- Establish a new Federal Insurance Office to monitor the insurance industry including regulatory gaps that could contribute to systemic risk;
- Restrict banks, bank affiliates and bank holding companies from proprietary trading or investing in a hedge fund or private equity fund;
- Increase regulation and transparency of the over-the-counter derivatives markets;
- Establish new regulation of credit rating agencies;
- Establish new requirements regarding executive compensation including shareholder “say on pay;”
- Require securitizers to retain economic interest in assets they securitize;
- Empower new CFPB as an independent office in FRB with broad new authorities and functions and responsibilities under wide range of current consumer financial protection laws;
- Establish extensive requirements applicable to mortgage lending industry, including detailed requirements concerning mortgage originator compensation and underwriting, high cost mortgages, servicing, appraisals, counseling and other matters; and
- Preserve enforcement powers of states respecting financial institutions and restrict preemption of state laws by federal banking regulators.
