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Important Finance Acts and Legislations
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Sarbanes-Oxley Act of 2002
Purpose: To protect investors from fraudulent financial reporting by corporations. Impact: Increased accountability of corporate executives, enhanced financial disclosures, and penalties for fraudulent financial activity.
Dodd-Frank Wall Street Reform and Consumer Protection Act
Purpose: To promote the financial stability of the United States by improving accountability and transparency in the financial system. Impact: Created Financial Stability Oversight Council, introduced Consumer Financial Protection Bureau, and imposed restrictions on risky financial practices.
Gramm-Leach-Bliley Act
Purpose: To allow consolidation of financial companies and services like banks, securities companies, and insurance companies. Impact: Repealed parts of the Glass-Steagall Act, led to increased competition in financial services.
Federal Reserve Act
Purpose: To establish the Federal Reserve System, the central bank of the United States. Impact: Created to provide the nation with a safer, more flexible, and more stable monetary and financial system.
Emergency Economic Stabilization Act of 2008
Purpose: To address the subprime mortgage crisis and authorize the Troubled Asset Relief Program (TARP). Impact: Provided bailout to banks and other financial institutions, and helped stabilize the economy during the Great Recession.
Investment Company Act of 1940
Purpose: To regulate investment companies and reduce conflicts of interest. Impact: Established standards for the investment company industry, providing investors with more transparent and fair market practices.
Securities Exchange Act of 1934
Purpose: To regulate secondary trading of securities in the US. Impact: Created the Securities and Exchange Commission (SEC) and now governs the trading of securities post-issuance.
Investment Advisers Act of 1940
Purpose: To regulate investment advisers and prevent conflicts of interest. Impact: Defined the responsibilities and activities of investment advisors and enforced registration with the SEC.
Securities Act of 1933
Purpose: To require disclosure and registration of all securities offered for sale to the public in the United States. Impact: Influenced initial public offerings (IPOs) by ensuring investor access to material information.
Commodity Exchange Act
Purpose: To provide federal regulation of all commodities and futures trading activities. Impact: Established the Commodity Futures Trading Commission and standardized the trading of commodities.
Patriot Act
Purpose: To strengthen U.S. measures to prevent, detect, and prosecute international money laundering and financing of terrorism. Impact: Expanded the tools of the Treasury Department to regulate financial transactions with a focus on anti-terrorism.
Credit CARD Act of 2009
Purpose: To establish fair and transparent practices relating to the extension of credit under credit card plans. Impact: Placed restrictions on fee and interest rate increases and imposed new disclosure requirements on credit card issuers.
Fair Credit Reporting Act
Purpose: To promote the accuracy, fairness, and privacy of consumer information contained in the files of consumer reporting agencies. Impact: Gave consumers rights to view and correct their credit information, and limited access of credit reports to legitimate users.
Truth in Lending Act
Purpose: To protect consumers in their dealings with lenders and creditors by requiring clear disclosure of key terms of the lending arrangement and all costs. Impact: Made comparisons among different lending options easier for consumers and guarded against unfair credit billing and credit card practices.
Fair Debt Collection Practices Act
Purpose: To eliminate abusive practices in the collection of consumer debts, to promote fair debt collection, and to provide consumers with an avenue for disputing and obtaining validation of debt information. Impact: Set guidelines for the conduct of debt collectors and provided mechanisms for dealing with abusive practices.
Electronic Fund Transfer Act
Purpose: To establish the rights, liabilities, and responsibilities of participants in electronic fund transfer systems. Impact: Standardized practices to protect consumers engaging in electronic transfers and provided a basis for the modern Electronic Funds Transfer (EFT) system, including ATMs and debit cards.
Bank Secrecy Act
Purpose: To require financial institutions in the United States to keep records and report certain financial transactions to the federal government, as a measure to combat money laundering, tax evasion, and other financial crimes. Impact: Has become one of the primary means to identify, detect, and deter money laundering and the financing of terrorism.
Jumpstart Our Business Startups (JOBS) Act
Purpose: To encourage funding of small businesses by easing various securities regulations. Impact: Allowed greater access to capital for small companies, expanded crowdfunding options, and created the concept of 'emerging growth companies'.
Home Mortgage Disclosure Act
Purpose: To require home mortgage lenders to disclose information regarding their lending practices. Impact: Promoted transparency, helping public officials to identify potentially discriminatory lending patterns and enforce anti-discrimination statutes.
Employee Retirement Income Security Act (ERISA)
Purpose: To protect individuals in their private pension and benefits plans. Impact: Established legal guidelines for pension plan management and provides protections for plan participants.
National Securities Markets Improvement Act (NSMIA)
Purpose: To promote efficiency and capital formation in the securities markets. Impact: Simplified securities regulation by more clearly dividing responsibilities between the federal and state governments.
International Money Laundering Abatement and Anti-Terrorist Financing Act
Purpose: To facilitate the prevention, detection, and prosecution of international money laundering and the financing of terrorism. Impact: Expanded the scope of the Bank Secrecy Act, imposed new compliance requirements, and enhanced due diligence procedures for financial institutions.
Fast Act (Fixing America’s Surface Transportation Act)
Purpose: To fund surface transportation infrastructure like highways and public transportation and includes provisions that impact the oversight of municipal advisors and the regulation of municipal securities. Impact: Extended and enhanced funding for the nation's roads, bridges, and transit systems and brought about changes to the regulations of municipal advisors.
Economic Growth, Regulatory Relief, and Consumer Protection Act
Purpose: To modify provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act for smaller banks and community lenders and to enhance consumer protections. Impact: Reduced regulatory burden on smaller financial institutions and modified requirements for certain bank holding companies.
Payment Card Industry Data Security Standard (PCI DSS)
Purpose: To standardize and enhance data security for cardholders across a wide array of payment channels. Impact: Established operational and technical requirements to protect cardholder data and reduce credit card fraud.
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