The Dodd-Frank Act was signed by President Obama July 2010. The primary aim of the act is to prevent a financial crisis by regulating the practices and processes of financial companies to enforce transparency and accountability and rules and regulations meant to protect their consumers. This is the administration’s answer to the looming financial crisis ahead. It will monitor and keep the balance on excessive risks to the country’s financial system and will eliminate the federal government’s dependence on banks and other financial institutions during the recession. Citizens have the ability to become a Dodd Frank Whistleblower if they suspect and have proof of fraud at a financial company.
Protection of Consumers Against Corrupt Business Practices by Financial Institutions
The provision of the act in protecting consumers allows for the creation of the Consumer Financial Protection Bureau. The bureau’s primary task is to oversee banking and non-banking financial institutions and monitor how their system works on credit cards, mortgages, and other financial products and services they offer their consumers. It will closely monitor all other financial institutions like mortgage companies, credit unions, collection agencies and credit card companies as well. Consumer concerns regarding credit cards, loans, and mortgages will be undertaken by the bureau. In order to extend their services to consumers, the CFPB provides consumers with access to information on financial products and services along with the implementation of a 24-hour toll-free hotline where consumers can report violations and issues and become a Dodd Frank Whistleblower.
The Dodd-Frank Act also included a provision that rewards individuals with valid reports on violations and other corrupt practices. This promotes transparency among financial insiders.
The Impact of the Dodd-Frank Act to Companies and Financial Institutions
Parts of the Dodd-Frank Act will be in effect this year and some will be spread over the next several years. Companies are now analyzing how the implementation of the Act can affect their business, both short-term and long-term. They are also studying how they can monitor developments and how their company can adapt to the changes as mandated. There is an amount of uncertainty as to the application of the Act and how will this affect not just the financial landscape of the country but also its political landscape. And it’s important for key players to stay on top of the developments regarding its implementation.
Protecting a Dodd Frank Whistleblower
A recent article in the Wall Street Journal speculated that the passage of the law would make it much more difficult for start-up businesses to raise capital and create new jobs. There are others who say that looking at the bigger picture, the implementation of the Act will benefit the economy as the financial industry matures and grows exponentially while at the same time reducing fraud and other corrupt practices. New jobs are also created in order to comply with the reporting requirements of the act.
Contact us today if you need representation in relation to the Dodd Frank Act