The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 was passed by US Congress with the objective of promoting financial stability by improving accountability and transparency in the financial system, ending “too big to fail”, protecting the American taxpayer by ending bailouts, and protecting consumers from abusive financial services practices. Under the Act, the extant American system of multiple supervisors continues.
However, a new Financial Stability Oversight Council (FSOC) under the chairmanship of the Treasury Secretary was created to identify systemic risks and gaps in supervision, and to recommend regulatory enhancements. Though the Federal Reserve’s role in the FSOC is not apparently very prominent, it has become the primary regulator for systemically important entities, thus expanding its supervisory role beyond large bank holding companies.