New regulations may change the way you do business with your financial institution
The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) passed in July 2010 is one of several major efforts to reregulate the financial services industry in the wake of the financial and economic crisis. It is a sweeping piece of legislation made up of numerous titles that will lead over the coming months and years to significant changes in how and where financial firms do their main businesses. In many cases, the Act is likely to reshape the economics of some of those businesses, forcing existing providers to reconsider the balance between risk, required regulatory capital, and potential returns.
The direct consequences of Dodd-Frank and other new regulations or standards, such as Basel III capital and liquidity standards, will fall mainly on financial institutions, particularly banks and securities firms. However, because these companies provide essential credit and liquidity to the corporate sector more generally, it seems clear that whatever emerges as the precise set of impacts on financial services will likely also have impacts on their customers. Further, there are parts of Dodd-Frank — such as those dealing with corporate governance, executive compensation and whistle-blower protection — that apply to all public U.S. companies and these will clearly have direct effects on nonfinancial companies.
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