The United States Senate and House of Representatives approved the Conference Report to HR 4173 (The Dodd-Frank Wall Street Reform and Consumer Protection Act) on July 15, 2010, and June 30, 2010, respectively. The legislation now heads to President Barack Obama for consideration.

This landmark legislation aims to address the issues that fueled the near-collapse of financial markets in 2008. The independent and non-partisan Congressional Budget Office estimated a $4.5 billion cost for fiscal year 2012 for the Act and a net decrease in the government deficit of $3.2 billion by 2020 due to the Act's effects.

This e-communication provides an overview of how the legislation’s 16 titles and several provisions will affect banks, consumers, and investors. More specifically, the legislation:

• Establishes federal oversight and regulation of the derivatives market and mandates, among other things, central clearing, trade execution on exchanges, margin requirements and regular reporting with respect to most derivative transactions that are not subject to exemptions. Read V&E's analysis of Title VII: Wall Street Transparency and Accountability - Regulation of Over-the-Counter Swaps Markets.
• Requires companies selling certain complex financial products, most notably mortgage-backed securities, to retain a portion of the risk; allows investors to file suit against credit rating agencies for “knowing or reckless” failure to conduct a reasonable investigation of the facts or obtain an analysis from an independent source with provision of a credit rating. 
• Authorizes regulators to impose restrictions on large, troubled financial companies; creates a process for the government to liquidate failing companies.
• Prohibits the Department of the Treasury from starting new programs or initiatives with funds from the Troubled Asset Relief Program (TARP); increases the deposit-insurance fee banks pay to the Federal Deposit Insurance Corporation.
• Prevents the largest financial institutions from making speculative investments with their own money; allows banks to take small stakes in investment funds including hedge funds and private equity funds, limited to 3 percent or less of a bank’s capital. 
• Creates a council of regulators to monitor systemic risks; gives the Federal Reserve expanded authority over large financial companies.
• Eliminates the Office of Thrift Supervision; merges its duties with the Office of the Comptroller of the Currency.
• Requires companies to set executive compensation by independent directors; gives shareholders a nonbinding vote on those decisions.
• Creates a federal regulator, within the Federal Reserve, to write and enforce rules protecting consumers of financial products (i.e., checking accounts, mortgages, and payday loans); increases the authority of state regulators to enforce protections.
• Requires lenders to ensure a borrower can repay a home loan by verifying income, credit history, and job status, and bans payment to brokers for steering borrowers to high-priced loans; prohibits pre-payment penalties and financial incentives for sub-prime loans.
• Mandates hedge funds, municipal financial and private equity advisers to register with the Securities and Exchange Commission (SEC) as investment advisers and provide information about their trades and portfolios necessary to assess systemic risk; raises the asset threshold for federal regulation of investment advisers from $30 million to $100 million; creates an office of Municipal Securities within the SEC.
• Alters the Municipal Securities Rulemaking Board (MSRB) to ensure that non-broker dealers constitute a majority of the Board members.
• Authorizes federal regulators to seize and break up troubled financial firms whose collapse might cause widespread damage; creates a liquidation procedure run by the FDIC. 
• Establishes a new, 10-member Financial Stability Oversight Council, chaired by the Treasury Secretary, that will identify and respond to emerging risks to financial stability. The Council could recommend to the Federal Reserve stricter rules for large, complex financial firms judged a threat to the financial system. In extreme cases, it would have the authority to break up firms.
• Mandates that the U.S. Government Accountability Office conduct a one-time audit of emergency lending programs; the Federal Reserve would be required to disclose (by December 1, 2010), details of loans made to banks.    
• Eliminates the role of Class A directors in selecting presidents at the Federal Reserve’s 12 regional banks; allows Class B and Class C directors to make such selection.