Regulatory Reform Proposal Comparison
- 1. REGULATORY REFORM UPDATE Comparison of the Original Regulatory Reform Proposal to the Dodd Compromise Proposal
- 2. SUPERVISION Original Proposal The Federal Reserve would be advised by a council of regulators and would take responsibility for those institutions who, either by size or business activity, pose a systemic risk.
- 3. SUPERVISION Dodd Proposal The Federal Reserve would retain supervisory jurisdiction over those banks with more than $50 Billion in assets. With regard to so-called “bubbles”, a systemic risk council would have authority to deal with such issues.
- 4. RESOLUTION AUTHORITY Original Proposal The Federal Reserve would be empowered to seize and wind down a failing institution that presents a “systemic risk”. The financial industry would bear the cost of such government intervention.
- 5. RESOLUTION AUTHORITY Dodd Proposal A $50 Billion “upfront” fee would be assessed on the financial industry. The fee would be used to cover the cost of any necessary liquidations of financial companies. Government led liquidations would be subject to review by a bankruptcy judge.
- 6. INVESTOR PROTECTION Original Proposal Shareholders would be given a non-binding vote regarding executive compensation.
- 7. INVESTOR PROTECTION Dodd Proposal Includes more substantive proposals for investor protection.
- 8. CONSUMER PROTECTION Original Proposal Would create a consumer protection agency with authority over all credit providers. Would require all lenders to offer standardized mortgages to borrowers.
- 9. CONSUMER PROTECTION Dodd Proposal Would establish a new consumer protection authority located within the Federal Reserve. An independent chairman would head the authority.
- 10. DERIVATIVES Original Proposal Derivative contracts would be standardized. Contracts would be processed through central clearing houses. Transactions would occur on electronic exchanges.
- 11. DERIVATIVES Dodd Proposal Unresolved. Bi-partisan debate still ongoing with regard to who/what entities would be excluded and the mandatory nature of exchange trading for derivative contracts.