Banking and finance are among the vital sectors that define the growth or downfall of any economy. It affects multiple jurisdictions, and with new developments and products, this sector is only growing big with time. Banking and finance laws cover everything from offering loans to individuals to multi-billion financial deals between big companies. If you are willing to make a career as a banking law or finance law lawyer, be prepared for long working hours, hefty paperwork, and getting know-how for Federal and state laws of different jurisdictions. These laws govern the contractual relationships between lenders and borrowers. They also help to protect the interests of both these parties during any financial deals or negotiations. Today we will guide you about the statutes and organizations that influence the banking and finance laws.
Primary federal statutes for the banking and finance sector
Finance practice requires an understanding of a variety of federal and state statutes and acts. Some of the Acts that every finance and banking lawyer must undergo are:
- National Bank Act of 1863 – The National bank act regulates the operations of national banks operating in the country. It supervises the loans and a reserve held by the banks and ensures to circulate the stable and uniform national currency. Strengthening the trust of people in the banking system of the USA is the primary purpose of the introduction of the National Bank Act of 1863.
- The Federal Reserve Act 1914 – It is one of the most significant acts to understand by banking and finance lawyers. It also empowers the authorities to develop and implement monetary policy for the best interests of the economy.
- The Banking Act of 1933 – This act provides regulations for safer use of bank’s assets and regulates the interbank control to prevent the undue diversion of the funds by the banks. It is also known as the emergency banking act of 1933 that created FDIC to provide insurance to the banks.
- The Federal Deposit Insurance Act – This act defines the powers and responsibility of the FDIC. The Federal deposit insurance act sets rules for the banks protected by the FDIC and regulates financial transactions. It also governs the business activities done by banks that are under its insurance cover.
- The Bank Holding Company Act of 1956 – The bank holding company act govern financial organizations and investment banks since May 9, 1956. The primary purpose of this act is to restrict the acquisition activities of multibank holding companies. This act controls both banking and nonbanking acquisition activities.
- Bank Secrecy Act – This act is also known as the currency and foreign transaction reporting Act of 1970. The sole purpose of introducing this act was to assist the government in identifying and preventing any unlawful financial transactions.
- The Dodd-Frank Act 2010 – It is among some of the most significant financial reforms in the USA. It is a consumer protection legislation meant to put strict regulations on Wall Street. It also mandates approval from the treasury secretary while lending bailout packages to individuals or insolvent firms.
In addition to these acts, there are many other acts such as The International Banking Act of 1978, the Gramm-Leach-Bliley Act, and the Consumer Protection Act that you need to understand. These acts provide regulations and guidelines for financial organizations, investment banks, mortgage banks, and corporate finance companies.
Regulatory authorities governing the Banking and finance law in the USA
It is vital to know about the authorities that govern the banking and finance sector of the country to understand the financial law. All banking and finance lawyers need to study and understand the guidelines by below authorities in the USA:
- The Board of Governors of the Federal Reserve System– It guides the operation of the Federal Reserve System. This authority ensures the fulfilment of banking laws according to the Federal Reserve Act. They monitor and regulate the banks of the country to protect the consumers and financial institutions. The board of governors of the Federal Reserve System also works to maintain the stability of the finance and banking sectors.
- The Federal Deposit Insurance Corporation– The FDIC regulates the banks that do not have a membership of the Federal Reserve System. This governing body is one of the vital parts of the financial system of a country since its creation in 1933. The purpose of FDIC is to ensure that none of the customers should lose a single penny due to the failure of banking or finance institutions.
- The Office of the Comptroller of the Currency– OCC falls under the U.S. Department of the treasury. The sole purpose behind the formation of this organization was to regulate and supervise the banks and saving associations in the country. It works with the motive of promoting a safe and diverse banking system to benefit the consumers as well as the economy.
- The Consumer Financial Protection Bureau– The primary purpose of this organization is to develop the regulations for consumer protection. It is vital to understand the framework of guidelines by this organization to practice finance law in the USA. The CIPB’s official website can help you with resources and information for protecting and manage financial transactions.
- The Financial Stability Oversight Council– FSOC is another significant institution working since 2010. It monitors the risks associated with the financial sector and banking systems of the country. The FSOC issue an annual report about financial and banking sector threats, and it is necessary to consider this report for dealing with finance and banking laws of the country.
Importance of gaining banking and debt finance law Information
It is essential to gain maximum know-how about the local and federal laws related to the banking and finance sectors. Also, you can consider answering services for solicitors which is one of the best business solutions for law firms. Being a lawyer, you have to deal with a variety of circumstances concerning clients. The diverse legal framework of the financial sectors makes it necessary to understand the laws or acts governing the practices and regulatory compliances for financial matters. To gain maximum exposure to the bank and finance laws, you can choose to take help from online legal resources such as the consumer financial protection bureau and legal information institute.
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