Laws, Acts, and Committees within Finance
Fair Housing Act
Equal Credit Opportunity Act
Community
Reinvestment Act
Gramm-Leach-Bliley
Act
ECOA prohibits credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or income. Creditors may ask you for most of this information in certain situations, but they may not use it when deciding whether to give you credit or when setting the terms of your credit.
The Fair Housing Act prohibits housing discrimination of one's
race, color, religion, sex, disability, familial status, and national
origin. It's coverage includes private housing, housing that receives
Federal financial assistance, and State and local government housing. It is
unlawful to discriminate in any aspect of selling or renting housing or to deny
a dweller to a buyer or renter because of the disability of that individual, an
individual associated with the buyer or renter, or an individual who intends to
live in the residence.
■The Community Reinvestment Act is intended to encourage depot institutions to help meet the credit needs of the communities in which they operate, including low- and moderate-income neighborhoods, consistent with safe banking operations.
The Gramm-Leach-Bliley Act requires financial institutions–companies that offer consumers financial products or services like loans, financial or investment advice, or insurance – to explain their information-sharing practices to their customers and to safeguard sensitive data.
"Again, the ECOA act is an important and fair piece of legislation. The Act prevents lenders from discouraging applications from or rejecting applications based upon race, color, religious affiliation, national origin, sex, marital status, age, etc. The Act also seeks to protect women and their credit ratings. Everybody should have access to credit. "
-Finance Expert Michael Scolaro
Managing Director of BMO Harris
"It is embarrassing the Fair Housing Act had to be written and passed. The rights afforded by the Act are simple: when selling or renting a house or apartment, the seller or lessor can not discriminate against a potential occupant. The law is generally fair and prevents abuses by landlords, developers and communities."
-Finance Expert Michael Scolaro
Managing Director of BMO Harris
"The CRA is a very important piece of legislation. The effect of the act is to compel banks to lend money in the communities they operate in. Failure to do so can result in meaningful restrictions against the offending bank, including the failure of the regulatory agencies to approve a potential bank acquisition. From first hand experience, the CRA will effect lending in areas that otherwise may have been ignored by the banks."
-Finance Expert Michael Scolaro
Managing Director of BMO Harris
"The Act allowed banks, brokerage house and insurance companies to be acquired by the same company, which had previously prohibited by the Glass Steagall Act. As a result of the Act, ever larger financial powerhouses were created. Many blame these creations for the financial crisis of 2007-2009. However, it should be noted the largest firm to fail (Lehman) was not diversified, while banks that not only survived but thrived (JP Morgan and BMO) were very diversified. I think the Act allowed US financial corporations to compete with similarly structured foreign financial institutions. I do not think the Act caused the financial meltdown of 2007-2009."
-Finance Expert Michael Scolaro
Managing Director of BMO Harris
FDIC
Sarbanes Oxely
Home Mortgage Disclosure Act
The Federal Deposit Insurance Corporation is a U.S. government organization that was created because of banks failing during the Great Depression. FDIC insurance covers checking and savings deposits at any FDIC insured bank. If the bank were to go under your bank accounts would be insured up to the maximum amount. The accounts that are covered are: checking accounts, savings accounts, money market deposit accounts, CDs.
Started in July 2002 by President Bush. This Act is designed to watch over the financial reports by professionals. This involves issues that include creating a public company, accounting, oversight board. It creates financial requirements for directors, officers, and auditors of major companys. The law is named after Senator Paul Sarbanes and Representative Michael Oxley.
It requires financial institutions to maintain and annually disclose data about home purchases, home purchase pre-approvals, home improvement, and refinance applications. It also requires branches and loan centers to display a HMDA poster
Over the years the FDIC has changed the amount that each Bank account is insured.
1934 - $2,500
1935 - $5,000
1950 - $10,000
1966 - $15,000
1969 - $20,000
1974 - $40,000
1980 - $100,000
2008 - $250,000
"Sarbanes Oley ("SOX") is an example of over-regulation at its worst. By creating increased reporting of publicly traded companies, the regulations have stifled the interest in smaller companies in registering on the stock exchanges such as the New York Stock Exchange ("NYSE"). Rather than protecting investors, the law creates, on average, $5,000,000 of compliance costs per publicly traded company. At least in part, the SOX costs have lead to a decrease in public capital formation."
-Finance Expert Michael Scolaro
Managing Director of BMO Harris
"I am not sure of the value of HMDA when the CRA, FHA and ECOA exist already. It creates mountains of paperwork and little incremental value."
-Finance Expert Michael Scolaro
Managing Director of BMO Harris
"The FDIC insures depositors their money will be safe. The FDIC also regulates banks to attempt to safeguard depositors monies. The FDIC is a very important piece of legislation as it calms individual investors in times of crisis and prevents "runs" on banks similar to those shown in "Its a Wonderful Life." Without the FDIC, banks would be self-regulated and riskier. The creation of the FDIC was a landmark, sensible idea."
-Finance Expert Michael Scolaro
Managing Director of BMO Harris
Federal Reserve Act
The U.S. Senate Committee on Banking, Housing, & Urban Affairs
The Federal Reserve Act is an Act of Congress that created and set up the Federal Reserve System, the central banking system of the United States of America, and granted it the legal authority to issue Federal Reserve Notes (now commonly known as the U.S. Dollar) The Act was signed into law by President Woodrow Wilson.
The U.S. Senate Committee on Banking, Housing, and Urban Affairs is one of the twenty Senate committees. The committee was established in 1913 by Senator Robert Owen. This committee manages laws and regulations that affect finance. This includes: banking, insurance, financial markets, security, housing, urban development, international trade, and economic
Sources:
hthttp://www.ffiec.gov/CRA/
http://www.ftc.gov/bcp/edu/pubs/consumer/credit/cre15.shtm
http://www.justice.gov/crt/about/hce/title8.php
http://www.federalreserve.gov/aboutthefed/fract.htm
http://business.ftc.gov/privacy-and-security/gramm-leach-bliley-act
http://www.ffiec.gov/hmda/
http://www.soxlaw.com/
http://www.fdic.gov/regulations/examinations/supervisory/insights/sisum04/industrial_loans.html
"The Fed conducts the US Government's money supply and regulates a portion of the nation's banks. By effectively setting interest rates through the purchase and sale of US Government debt, the Fed has the ability to alter the country's economic course. As the government's deficits continue to grow, the Fed will have an even harder time maintaining the desired outcomes."
-Finance Expert Michael Scolaro
Managing Director of BMO Harris