The Dodd-Frank Act: How it Impacts Specific Industries, Entities and Transactions
The Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Act”) was signed into law by President Obama on July 21, 2010. The Act consists of sixteen distinct Titles on a wide variety of topics. Once implemented by the required regulations, the Act will significantly alter the U.S. financial regulatory system. All financial institutions will be directly and materially affected by the Act’s accompanying regulations, and non-financial institutions that use regulated financial products will be indirectly affected. Additionally, the Act’s amendments to Sarbanes-Oxley and broad changes to executive compensation and corporate governance rules will impact all U.S. public companies.
This Overview Memorandum is intended to provide a very brief summary of those Titles of the Act that are most significant to our clients. In addition to this Overview Memorandum, Cadwalader has prepared a series of memoranda, each discussing a different aspect of the Act and how it will affect different industries, types of entities and transactions. For a list of the related topic-specific memoranda, see Appendix A to this memorandum or visit our website.
The Act was adopted in response to the economic crisis. Accordingly, the Act is intended to create future financial stability, better protect consumers and stimulate lending to underserved communities.
Nonetheless, we emphasize that the Act requires extensive regulations in order to be implemented. Accordingly, the ultimate impact of the Act is in large part still difficult to estimate. In the memoranda accompanying this overview, we have pointed out some of the questions we expect to arise. No doubt many open issues will be addressed in the adoption and implementation of regulations under the Act or in further amendments to the Act. That said, until regulations are proposed, it will be difficult for many of the financial institutions and companies that will be impacted by the Act to adopt more than tentative plans to adapt to its requirements.