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Dodd-Frank Act and Consumer Protection

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Find (e.g., from the New York Times, Wall Street Journal, Economist, Bloomberg, any of the Federal Reserve Banks) on the Dodd-Frank Wall Street Reform and Consumer Protection Act. Post copy of the article - you must turn it in to receive full credit. After reading the article, write a concise and to-the-point essay that includes:

A. A summary of the article.

B. Explain how the article helped you to understand Dodd-Frank Act (or an aspect of it) more clearly. That is, write as if you are explaining to your fellow classmates why the article is worth reading- what are they going to get out of it?

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The chosen NY Times article is attached.

A.
In this article it is stated that the legislators in the senate are divided during the application of the The Dodd-Frank Wall Street Reform and Consumer Protection Act and regulators are ignoring the congressional intent. Even the Volcker Rule which seems like a simple rule that prohibits banks in engaging proprietary trading is composed of 298 pages prepared by the regulators. Rules are very complex when it comes to application such as "skin in the game" rules for mortgage which proposes that lenders who sell mortgages to investors should retain some of the risk. Thus there should be exceptions that ...

Solution Summary

This solution discusses the Dodd-Frank Act with regards to Wall Street, and consumer protection.

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Dodd-Frank Wall Street Reform and Consumer Protection Act

On July 21, 2010, President Obama signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank). Among the vast number of changes, there is good news. Dodd- Frank permanently relieves smaller public companies from the requirement of providing auditor attestation under Section 404 of the Sarbanes-Oxley Act (SARBOX or SOX).

Section 404(a) of SARBOX requires all public companies to include in their annual reports on Form 10-K a report from management on the effectiveness of the company's internal control over financial reporting. Section 404(b) requires the company's independent auditor to attest to management's assessment of the effectiveness of those internal controls.

Due to the high costs of complying with SARBOX Section 404(b), the Securities and Exchange Commission (SEC) has postponed the obligation of "non-accelerated filers" to comply with the attestation requirements of Section 404(b), the most recent extension expiring June 30, 2010. A "non-accelerated filer" is an Exchange Act reporting company that does not meet the definition of either an accelerated filer or a large accelerated filer. It includes, but is not limited to, "smaller reporting companies" that are generally those companies with less than $75 million in worldwide public float.

Dodd-Frank adds a new Section 404(c) to SARBOX that is effective immediately and provides that the auditor attestation requirement of Section 404(b) will apply only to accelerated filers and large accelerated filers. Although non-accelerated filers will continue to provide the report from management in their annual reports, the permanent exemption from 404(b) should significantly reduce the ongoing costs of being a public company.
What are some other important requirements of SOX that are applicable to public companies, and do you think these have any real impact on internal controls and fraud risk management

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