What is Dodd-Frank, and What Does it Mean for Your Money?
Government regulation has been a hot topic in politics for a number of decades now. After the Wall Street crash of the late 2000's, Congress added to the regulation of the financial services industry with another piece of compliance legislation, the Dodd-Frank Act.
This bill took more than a year to finalize and some of its provisions remain controversial and not fully implemented to date.
Financial Regulation Costs Banks Money
Financial regulations, also known as compliance or governance, like Dodd-Frank and Sarbanes-Oxley cost banks a good deal of money to comply with the numerous disclosure and reporting requirements imposed by these bills. The extent of the actual costs, and how much the costs get passed on to the consumer, is hotly debated. Conservative anti-financial regulation groups and bank lobbyists have been especially vocal in their criticism of the Dodd-Frank Act, particularly regarding how much its full implementation will cost banks. Bernstein Research has issued a report projecting losses of over $5 billion in trading revenue by big banks from implementation of the open market for derivatives provisions of Dodd-Frank. Other aspects of Dodd-Frank are also projected to cost banks many millions of dollars in process restructuring in order to reach full compliance.
Consumer Financial Protection Bureau and Debit Card Fee Limits
On the plus side for consumers, Dodd-Frank includes sections creating the Consumer Financial Protection Bureau (CFPB) and put caps on debit card fees in place. The CFPB is up and running and debit card fee limits are in effect. Small, medium and large businesses in the financial services sector have to cope with the reality of Dodd-Frank today. It is quite possible that disclosure and/or compliance requirements will change in the future, which is why it is imperative for financial services firms dealing with compliance to employ experts to make sure that standards are adequately followed. IT providers can assist not only with initial compliance, but with ongoing compliance in daily operations as well.
IT Compliance in Dodd-Frank
As with most forms of compliance, Dodd-Frank requires financial services companies to follow a long list of best practices at all times, governing their IT policies and foundations. Post-implementation, the consistant adherance to these policies must be documented, in case of an audit. The list of policies includes information governing policies, business continuity and disaster recovery plans, incidence response policies, and many more.
A skilled IT company will be equipped with proven best practices that will keep your business compliant at all times. Contact an iCorps representative for a free consultation of your IT compliance needs. For more information, reach out to iCorps for a free consultation.