Many of the Dodd-Frank Act’s provisions will change the way bank holding companies and their affiliates are regulated by the Federal Reserve Board under the Bank Holding Company Act. In addition, the new law subjects new types of financial organizations to Board supervision and regulation and greatly expands the Board’s responsibility for oversight of the financial system as a whole.
As a result of the Dodd-Frank Act, the Bank Holding Company Act will touch every systemically important financial institution operating in the United States. The BHC Act already comprehensively regulates bank holding companies and gives the Federal Reserve substantial supervisory authority over their activities and operations. The Dodd-Frank Act expands the Board’s authority even further and extends key provisions of the BHC Act to financial companies not traditionally subject to bank holding company regulation. Nonbank financial companies also will be subject to significant regulation by the Board outside the BHC Act framework.
This paper discusses the implications of key provisions of the Dodd-Frank Act for bank holding companies and systemically important nonbank financial companies.