Dodd-Frank Act versus the Treasury`s original proposal

I felt like revisiting the past today and writing about the Dodd-Frank Act versus the Treasury`s original proposal. The proposal was made in 2009 whereas the Act was passed a year later in 2010. I will touch on some areas (and not all of them) which I deem are relevant:

Too big to fail
The Treasury initially wanted to increase the FDIC (Federal Deposit Insurance Corporation)`s authority as either a receiver or conservator. Under the Act, the FDIC had the jurisdiction of receivership only. Investopedia has a concise definition of receivership.

Systematic risk regulation
The FSOC (Financial Stability Oversight Council) was to advise the FED (Federal Reserve) in the original proposal. However, in the Act, the FED was to work for the FSOC. To know more about what the FSOC and what it does, head over here.

FED reform
Back then, members of the Congress were pretty upset with the FED and were pushing for a reform. Arguably the most prominent area where a reform was made is in terms of the FED`s authority under Section 13(3) of the Federal Reserve Act. During the pre-Dodd-Frank, the FED could make loans to "any individual, partnership or corporation". It was then restricted to lending via "facilities with broad-based eligibility." This line was intended to prevent bailouts of situations similar to Bear Sterns or AIG.

The Dodd-Frank Act took nearly 13 months to pass and a massive 2 319 page financial reform law. Even today, the battle for financial reform is still ongoing.

Reference:
1. Binder, A.S.(2013). After the music stopped. New York: Penguin Books.