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com
The Dodd-Frank Wall Street
Reform and Consumer
Protection Act
Frank C. Bonaventure
June . !oo"er
Penn# Somer-$reif

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2

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Regulations
Interpretations
First But %ot The &ast &ook

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Charter Conversions

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Financial Sta'ilit# (versi)ht Council
Heads of Agencies plus an individual with
insurance expertise
Purpose

Indentify risks presented bank holding

companies and non-bank financial companies

Promote market discipline

Respond to threats to stability of ! financial

system

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6
Savin)s Associations
"#! is abolished
#hrift charter is retained
All regulation of savings associations
transferred to "$$
All regulation of savings and loan holding
companies is transferred to %ederal Reserve
"$$ will designate a &eputy $omptroller to
have responsibility over savings associations

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nhancin) Financial *nstitution
Safet# and Soundness Act of
+,-,
Preserves federal thrift charter
'erges "ffice of #hrift !upervision out
of existence
&eposit insurance reforms

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8

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(TS &ife ."ectanc#/ -+--0
1onths
#he "#! must (transfer)*

+mployees, funds, and property "$$

Rulemaking authority, powers and duties to

supervise federal savings associations "$$

Regulatory authority over federal savings bank

and mutual holding companies %ed

Regulatory authority over state chartered thrifts

%&I$

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(ffice of the Com"troller to
Charter and Re)ulate Federal Thrifts
"$$ - Primary federal regulatory
authority over federal thrifts
$omptroller to designate new deputy
controller responsible for the
examination and supervision of federal
thrifts
"$$ can continue to charter new federal
thrifts

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Thrift charter "reserved2 'ut do the
'urdens no3 out3ei)h the
'enefits4
#he elimination of the "#! will also eliminate some of
the key benefits of choosing the thrift charter, and
leave the "$$ enforcing two different sets of rules
$hange in supervisory culture
Home "wners .oan Act /(H".A)0 will continue to
govern the powers and regulation of thrifts and their
holding companies, but each of the agencies that
assumes "#! responsibilities can be expected to
interpret and enforce the H".A in a manner that will
mostly rationali1e and reconcile the regulatory
treatment of similarly situated depository institutions

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.oss of blanket preemption
#he 2#. #est retained, but Act
increases the risks and conse3uences
associated with a failure to comply

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*f thrift fails to meet the 5T&
test2 it is/

4o longer required to convert to a national bank

under the Act, but would become sub5ect to
national bank activities limitations

6ulnerable to enforcement action for violating

!ection 7 the H".A

Prohibited from paying dividends unless /80

permissible for a national bank, /90 are necessary
to meet obligations of a holding company, and /:0
pre-approved by the "$$

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FD*C to Re)ulate State Savin)s
Associations
All functions of the "#! relating to state
savings associations will be transferred to the
%&I$
%&I$ ;oard seat once held by the director of
the "#! is given to the director of the new
$P%;

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Federal Reserve to Re)ulate
Thrift !oldin) Com"anies
<iven authority over thrift holdings
companies and their non-depository
subsidiaries

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Re)ulations2 Rules2 $uidelines
and nforcement Proceedin)s
Remain
#he transfers will not abate or affect
any*

"#! action or proceeding

#erms of any enforcement orders,

agreements, determinations, regulations,
interpretive rules

<uidelines, procedures and other advisory

matters

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What a'out (TS m"lo#ees4
#o the extent practicable, the Act directs
each transferred employee, including
examiners, to initially be placed in a
position at the "$$ responsible for the
same functions and duties
ncertainty exists about long-term
expectations

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De"osit *nsurance Reforms -
FD*C Assessment
%&I$ assessments for most institutions
will now be determined based on*
#he average consolidated total assets
minus
the average tangible e3uity

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Reserve Ratio
'inimum reserve ratio is set at 8=:7>
of estimated insured deposits
%&I$ has until !eptember :?, 9?8? to
grow the &I% to the new floor of 8=:7>

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6+7,2,,, De"osit *nsurance
Amends %&IA by permanently
increasing the standard maximum
deposit insurance from @8??,??? to
@97?,???

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Re)ulation 5 Re"ealed
%RA, %&IA, and H".A amended to
eliminate prohibitions against the
payment of interest on demand deposits
Authori1es interest-bearing commercial
checking accounts
+ffective one year after enactment

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8nlimited De"osit *nsurance for
%on-*nterest Bearin) Transaction
Accounts
%&I$ will fully insure the net amount
maintained in a non-interest bearing
transaction account until &ecember 89,
9?89

Interest cannot be paid or accrued on the

account

'ust be a standard demand deposit account

without any prior notice of withdrawal
re3uirements

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Bank and Savin)s Association
!oldin) Com"an# and
De"ositor# *nstitution
Re)ulator# *m"rovements Act
of +,-,

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9-:ear 1oratorium on *&Cs
:-year moratorium on approving an
application for %&I$ deposit insurance
by an I.$
Also applies to any change of control
application, unless the I.$ is in danger
of default, or the change of control
results from a merger or ac3uisition of
the commercial company

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*ncreased Standards for
*nterstate Ac;uisitions
;ank must now be well capitali1ed and
well managed to to obtain %ed approval
for interstate branch ac3uisitions
Interstate merger ac3uisitions re3uire
the resulting institution be well
capitali1ed and well managed

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De Novo *nterstate Branchin)
!tates no longer permitted to (opt-in)
to de novo interstate branching
Authori1ed by all national and state
banks

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nhanced Restrictions on
Affiliate Transactions
;roadens the existing restrictions on affiliate
and insured transactions under 9:A and 9:;
of the Reserve Act to include financial
products such as repurchase agreements
and derivative transactions that involved a
credit exposure to affiliate
+ffective one year after the #itle III transfer
date

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&e)al &endin) &imits
4ational bankAs legal lending limits are expanded
to consider credit exposures to counterparties
arising from certain derivative transactions such
as swaps, repurchase agreements, reverse
repurchase agreements, and securities lending or
borrowing transactions
'aryland follows national bank legal lending
limits, so absent new state regulations, this
would likely also apply to 'aryland state
chartered banks

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&imitations on Charter
Conversions
4o institution that is sub5ect to a cease and
desist order, formal enforcement order, or
memorandum of understanding may convert its
charter, 4.+!!

#he regulatory authority that issued the order

does not ob5ect to the conversion, and

#he regulatory authority for the institution

following the proposed conversion, adopts and
enforces the existing order as a condition to
approving the application

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30
Collins Amendment - Tou)her
Ca"ital Re;uirements and &evera)e
Ratios
&irects the federal bank regulators to impose,
over time, minimum leverage capital and
risk-based capital re3uirements
4ewly issued (hybrid) instruments, like trust
preferred securities, will be off-limits in #ier 8
capital calculations
Regulatory capital deductions for these hybrid
instruments before 7B8CB9??C would be
phased in from 8B8B9?8: through 8B8B9?8D

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Smaller Banks $randfathered from
Ca"ital Deduction Re;uirements
#rust preferred investments for banks
and ;H$s with less than @87 billion in
assets as of 89B:8B9??C will be
grandfathered, and not be re3uired to
make capital deductions for these
instruments, but it will apply to thrift
holding companies in five years

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Reasona'le Fees for Pa#ment Card
Transactions
Re3uires that any interchange
transaction fee for a debit transaction
be (reasonable and proportional) to the
actual costs incurred by the issuer=
%eds directed to enact final rules within
C months to establish the standards for
assessing (reasonable and proportional)

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.em"tions to *nterchan)e Fees
!mall issuers with assets of less than
@8? billion are exempted from the price
regulation provisions
&oes not apply to reloadable prepaid
cards and cards provided pursuant to
government administered payment
programs

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34
Truth-in-&endin) Act
#I.AAs coverage to include non-real
estate secured consumer credit
transactions and consumer leases in
amounts up to @7?,??? /ad5usted
annually for inflation beginning in 9?890

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Small Business Data Collection
+$"A amended to re3uire lenders to, in
connection with credit applications, to
in3uire whether the business is a
women-owned, minority-owned or small
business, and to maintain a record of
the responses received

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1ort)a)e Reform and Anti-
Predator# &endin) Act

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Creates a Dut# of Care
Act creates a federal (duty of care) which
re3uires*
/80licensing and registration of mortgage
originators /under the !A%+ Act0
/90borrowers have a documented ability to repay
the loan and are provided with a (net tangible
benefit)
/:0 .oans do not have (predatory characteristics)
/E0.oan documents contain full disclosures and
originatorAs uni3ue identifier

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Creates a %e3 &ia'ilit#
"riginators who violate the (duty of
care) will be liable to a borrower for the
greater of actual damages or an amount
e3ual to three times the total direct and
indirect compensation received by the
originator P.! the costs of the action

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Creates %e3 &ender &ia'ilit# <
continued
Act also provides consumers with right to
rescind a loan for violation of the ability to
repay andBor net tangible benefit
standards
.enders have the ability to cure /within C?
days0, which is defined as a no-cost
modification or refinancing of the loan that
would have satisfied the minimum
standards upon origination of the loan

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Safe !ar'or for =5ualified
1ort)a)es>
Act creates a safe harbor for (2ualified
'ortgages), which is defined as a loan*
/80 %ully documented, :? year fixed rate with no negative
amorti1ation or IB" features
/90 APR does not exceed average %ed prime rate by more
than 8=7> /:=7> for sub= liens0
/:0 nderwriting based on fully-indexed rate
/E0 Income and other financial resources of borrower are
verified
/70 'eets debt-to-income test prescribed by federal
banking agencies

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%e3 T*&A &ia'ilit# and
nforcement Provisions
.enders who violate the ability to repay or
anti-steeringBcompensation provisions can be
liable for all interest and fees paid by
borrower as well as actual and statutory
damages
!tatutory damages for certain violations
increased to @9?? - @9,???

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Statute of &imitations
!tatute of limitations is : years for
fixedF and 8 year after first reset for
AR' or D years in total for AR' with
longer period for resets

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scro3 Accounts Re;uired
+scrow accounts re3uired for certain first
lien mortgage loans*

<uaranteed by state or federal government

Re3uired by state law

Principal does not exceed conforming loan limit

and APR exceeds the average prime offer rate
by 8=7>

Principal exceeds conforming loan limit and

APR exceeds the average prime offer rate by
9=7>

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T*&A and RSPA Amendments
Servicer ma# not/
%orce-place insurance

$harge a fee for responding to a 3ualified written re3uest

%ail to take timely action to respond to borrowerAs
re3uest to correct errors related to payment, payoff
amounts or avoiding foreclosure
%ail to respond within 8? business days of a re3uest from
a borrower to provide contact information about the
owner or assignee of loan
%ail to comply with other H& regulations
%ail to return /or credit0 an escrow balance within 9?
business days of loan being paid off

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A""raisal *nde"endence
Amends #I.A to prohibit acts or practices
that violate appraisal independence*

Appraisal conducted by person with an

interest in underlying transaction

'ischaracteri1ing the appraised value

Influencing or encouraging appraiser to

reach a target value

Githholding payment for an appraisal report

when performed in accordance with contract

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."ands State Attorne# $eneral
nforcement Authorit#
!tate A< enforcement actions under #I.A
expanded to include*

&uty of care

Anti-!teering

Ability to repay

+scrow re3uirements

Appraisal independence

Prompt credit re3uirements

Pay-off statements

Property appraisal re3uirements for higher-risk

mortgages

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Re;uires Additional Disclosures
At closing*

Information regarding settlement charges,

including the aggregate amount of such charges,
and the amount included in the loan and that to be
paid at the closingF

the approximate wholesale rate of funds in

connection with the loanF

'ortgage originator compensationF

#otal interest payments over the loan term as a

percentage of the loan principalF and

$ertain monthly payment information for variable

rate loans with escrow accounts=

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4ew information that must be provided on
periodic statements to be provided during
each billing*

.oan principal

$urrent interest rate

&ate on which rate will reset or ad5ust

Prepayment fee

.ate fee

Phone number and email address that

borrower can use to obtain information on the
loan

Information on credit counseling agencies

1ore Disclosures

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Consumer Financial
Protection Act of +,-,
?Title @A
;ureau of $onsumer %inancial
Protection /$%P;0
Preemption

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Bureau of Consumer Financial
Protection
Independent ;ureau at the %ederal Reserve

Rules H orders not sub5ect to %ederal Reserve

review

%inancial !tability "versight $ouncil can set aside

final regulations based on safety and soundness
concerns
(Regulate the offering and provision of consumer
financial products or services under the %ederal
consumer financial laws)

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Bureau of Consumer Financial
Protection continued
Principal office in &$, &irector may establish
regional offices
$oordinate with other federal and state
regulatory agencies to (promote consistent
treatment of consumer financial and investment
products and services)
6ictim Relief %und

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Communit# Banks and the
Bureau of Consumer Financial
Protection
!ub5ect to $%P; rules, orders,
regulations
4ot sub5ect to $%P; examinationB
supervisory or enforcement authority
$%P; rules enforced by prudential
regulator

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Communit# Banks and the
Bureau of Consumer Financial
Protection continued
$%P; &irector can re3uire certain
reports
!upervision and enforcement authority
over (covered persons) over @8? billion
in assets or not an insured depository
institution

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Bureau of Consumer Financial
Protection < Pur"ose
Implement and enforce the federal
consumer financial protection laws
consistently (for the purpose of ensuring
that all consumers have access to
markets for consumer financial products
and services and that markets for
consumer financial products and services
are fair, transparent and competitive)

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=Financial Product or Service>
+xtending credit and servicing loans
Providing real estate settlement services
+ngaging in deposit-taking activities
Providing check cashing, check collection or
check guarantee services
Providing payments or other financial data
processing products or services to a consumer
by technological means
$ollecting debt related to any consumer
financial product or service
As the $%P; may determine

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=Consumer Financial Product or
Service>
A financial product or service offered or
provided for use by consumers primarily for
personal, family or household purposes
+xtending credit and servicing loans,
providing real estate settlement services, and
collecting debt related to any consumer
financial product or service delivered, offered
or provided in connection with the above

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=Federal Consumer Financial
&a3>
#itle I of &odd-%rank
Rule or order of the $%P;
+xisting consumer protection laws

+3ual $redit "pportunity Act

%air $redit ;illing Act

Home "wners Protection Act of 8CCJ

%air &ebt $ollection Practices Act

Home 'ortgage &isclosure Act of 8CKE

Home "wnership and +3uity Protection Act of 8CCE

#ruth in .ending Act

#ruth in !avings Act

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Bureau of Consumer Financial
Protection Functional 8nits
Research, analy1e and report on

'arket developments for consumer financial

productsBservices

$onsumer awareness, understanding, use of

disclosure

$onsumer behavior

+xperience of underserved consumers

$ommunity affairs
$ollecting and tracking complaints

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Bureau of Consumer Financial
Protection (ffices
%air .ending and +3ual "pportunity
%inancial +ducation
!ervice 'ember Affairs
%inancial Protection for "lder Americans
$onsumer Advisory ;oard

Advise and consult with $%P;

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('Bectives of the Bureau of
Consumer Financial Protection
$onsumers provided with timely and
understandable information
Protected from unfair, deceptive or abusive
acts and practices, discrimination
"utdated, unnecessary burdensome
regulationsBreduce regulatory burdens
$onsistent enforcement
#ransparent, efficient markets to facilitate
access and innovation


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Primar# Functions of the Bureau
of Consumer Financial
Protection
%inancial education programs
$onsumer complaints
Identify risks - consumers, markets
!upervise certain financial institutions
and other companies, enforcement
Rules, orders and guidance
implementing federal consumer financial
law

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Rulemakin) Authorit#
Prescribe rules, issue orders and guidance, to
administer and carry out the %ederal consumer
financial laws and prevent evasion thereof

Prohibiting unfair, deceptive or abusive acts or practices

Potential benefits and costs, impact
$onsult with prudential regulators and other
federal agencies
+xemptive authority
"ngoing monitoring of risks to consumers
Restrict mandatory pre-dispute arbitration

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.em"tions
Auto dealers
'erchants, retailers, other sellers of
nonfinancial goods and services
Real estate brokerage activities
Accountants and tax preparers, lawyers
Regulated by state insurance regulator

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Preem"tion After Dodd-Frank

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89 =!=$= L :K8 /8C8:0

Preemption of certain state laws - real

estate lending activities
89 =!=$= L :D /8C9K0

Preemption with respect to interstate

branches

"$$ enforcement of applicable state laws

- branches of national banks
arl# Statutor# Preem"tion

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89 =!=$= L J7 /8C::0

most favored lender doctrine

89 =!=$= L 8ED:/a0/80 and /g0
/8C::0 /#hrifts0

"#! examination authority

Preemption of state usury laws

arl# Statutor# Preem"tion
continued

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67
Preem"tion < %ational Banks
Marquette National Bank of Minneapolis v.
First Bank of Omaha Service Corp. /8CKJ0

4ational bank may charge out-of-state credit

card customers interest rate allowed by home
state, even if in violation of usury laws in the
customerAs state
&epository Institutions &eregulation of
'onetary $ontrol Act of 8CJ? /89 =!=$ L
8J:8d0

Allowed state banks to charge interest rates

allowed in state where bank located

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Preem"tion < %ational Banks
continued
Preemption expands to cover most state
consumer laws

$ases

"$$ opinions

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Rie)le-%eal *nterstate Bankin)
and Branchin) fficienc# Act of
-CCD
!ection :D/f0 of 4ational ;ank Act
Interstate branch of national banks
generally sub5ect to state consumer laws
+xemptions from state law where federal
law preempts application of state law to
national bank, or "$$ determines the
state law discriminates against national
banks

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Rie)le-%eal *nterstate Bankin)
and Branchin) fficienc# Act of
-CCD continued
<ranted "$$ authority to enforce non-
preempted state consumer laws

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71
Barnett Bank of Marion Country,
N.A. v. Nelson ?-CCEA
4;A provision authori1ing insurance agent
activities in small towns for national banks
preempts state law prohibiting national bank
from selling insurance
(Ghere $ongress has not expressly
conditioned the grant of MpowerA Nto national
banksO upon a grant of state permission P no
such condition applies=)

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Barnett Bank of Marion Country,
N.A. v. Nelson ?-CCEA continued
(;arnett !tandard)

$onflict preemption

$ase by case basis

Preemption continued to expand after Barnett

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-+ C.F.R. FF G.D,,,2 G.D,,G -
G.D,,C ?+,,DA
"$$ rules on preemption and visitorial powers
!tate laws that (obstruct, impair or condition
a national bankAs) lending, deposit taking
powers or other federally-granted powers not
applicable to national banks
!pecific types of laws that doBdo not apply to
national banks

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74
-+ C.F.R. FF G.D,,,2 G.D,,G -
G.D,,C ?+,,DA continued
+xclusive supervisoryBvisitorial power over
national banks /banking activities0

!tates have no examination or supervisory power

over

applicable state laws can not be enforced by states

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75
Watters and Cuomo
Watters v. Wachovia Bank, N.A. /9??K0

!ubsidiaries of national banks not sub5ect to state

licensing, visitorial and reporting re3uirements to same
extent as the bank itself
Cuomo v. Clearin !ouse Association, ".".C., #t.
Al. $%&&'(

Invalidated "$$As prohibition of state enforcement of

applicable state laws - !tates may prosecute
enforcement actions to enforce applicable state laws

4o investigationBenforcementBsubpoena power outside

of lawsuit to enforce

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76
Thrifts < (TS Re)ulations
Addressin) Preem"tion
89 $=%=R= L 7E7=9

#he (exercise of the N"#!OAs authority is preemptive

of any state law purporting to address P the
operations of a %ederal savings association)
89 $=%=R= L 77K=88 /8CCK0

Preempts state law with respect to deposit-related

activities
89 $=%=R= L 7D?=9 /8CCD0

Preempts lending-related state laws

!pecifies certain laws not preempted

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77
State Farm Bank v. Reardon
?+,,0A
Applied Watters principles to thrifts
!tate laws preempted with respect to
exclusive agents exercising the lending
powers of a federal savings association
%ocus on activity being regulated, not
who is being regulated
Additional cases upholding preemption

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78
Summar#
;road preemption prior to &odd-%rank
with respect to (core banking) activities
"$$ and "#! have expanded idea of
(core banking) for more extensive
preemption
%ield preemption
"#! preemption almost universal
&odd-%rank will significantly narrow
preemption

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79
=State Consumer Financial &a3>
A !tate law that does not directly or
indirectly discriminate against national
banks and that directly and specifically
regulates the manner, content, or terms
and conditions of any financial transaction
/as may be authori1ed for national banks
to engage in0, or any account related
thereto, with respect to a consumer

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80
Preem"tion 8nder Dodd-Frank
!tate consumer protection laws may be
preempted*

&iscriminatory effect on national

banksBthrifts,

;y "$$ regulationBorder or court*

"n a case-by-case basis - impact of a particular
!tate consumer protection law on any national
bank

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81
Preem"tion 8nder Dodd-Frank
continued
If the law (prevents or significantly interferes
with the exercise by the national bank of its
powers)
In accordance with the Barnett standard, or

.aw is preempted by another %ederal law

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82
Preem"tion 8nder Dodd-Frank2
continued
'ust (consult with) $%P;
"$$ must review each preemption
determination every 7 years, publish
decision to continue, rescind or amend
for notice H comment
+xisting contracts (grandfathered)
&oes not seem to contemplate licensing

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83
Preem"tion 8nder Dodd-Frank
Federal Thrifts
%ederal thrifts sub5ect to same preemption
standards as national banks

!pecifically states that !ections E and 7 of the

H".A do (not occupy the field in any area of !tate
law)
H".A !ection 7/a0

"#! &irector authori1ed to prescribe regulations

(to provide for the organi1ation, incorporation,
examination, operation and regulation of P %ederal
savings associations)

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84
Preem"tion 8nder Dodd-Frank
Federal Thrifts continued
H".A !ections E and 7

Provide for supervision of thrifts by "#! and

provides extensive rules for their operation

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85
State nforcement Po3ers
!tates may enforce Act and rules
promulgated thereunder against state-
chartered banks
!tates may enforce $%P; rules against
national banks and federal thrifts
$odifies Cuomo with respect to state
enforcement actions against national
banks and thrifts to enforce applicable
state law

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86
Preem"tion for %ational Bank
Su'sidiaries after Dodd-Frank
!tate laws apply to non-bank
subsidiaries or affiliates of a national
bank to the same extent apply to any
person, corporation or other entity
sub5ect to such state laws

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87
*nterest Rates
Right of national banks to charge interest
at the maximum rate allowed by state
banks in the state where located not
affected=
Ability of national banks to (export)
interest rate of state they are located in
to other states in which they operate
unclear=
$%P; not authori1ed to establish a usury
limit

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88
Cor"orate and Securities
Provisions
?Title *@A

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89
Regulation & Private "fferings

(;ad boy) restrictions for Rule 7?D offerings

$hanges to (accredited investor) standard

Anti-%raud .iability

Aiding H abetting liability extended to all

provisions of the !ecurities Act

Aiding H abetting liability extended to (reckless)

behavior

!till no private right of action for aiding H

abetting
!tudy
Securities Provisions

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90
Additional enforcement tools for !+$
!+$ empowered to shorten the 8?-day
filing timeframe for %orm :, !chedules 8:&
and 8:<
Securities Provisions
continued

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91
Private PlacementHRe)ulation D
(vervie3
+very offer or sale of securities re3uires
registration or exemption
Regulation & provides a (safe harbor)
exemption for private offerings in compliance
with its provisions
Rule 7?7 - up to @7 million, up to :7 non-
accredited investors and unlimited accredited
investors

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92
Private PlacementHRe)ulation D
(vervie3 continued
Rule 7?D - up to :7 non-accredited but
(sophisticated) investors, unlimited accredited
investors
4on-accredited investors must be provided
certain prescribed information and audited
financials

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93
=Bad Bo#> Restrictions
$ertain issuers cannot conduct an
exempt private offering under Rule 7?7

Prior registration statement sub5ect to !+$

stop order /7 years0

$onviction or restraining order - purchase

or sale of a security or the making of any
false filing with the !+$

$ertain bars for officers, directors, 8?>

stockholders

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94
=Bad Bo#> Restrictions2 continued
Act extends these restrictions to Rule 7?D
private offerings
4o time limit for convictions in connection
with the purchase or sale of a security or
making a false !+$ filing

www.ober.com
95
=Bad Bo#> Restrictions2 continued
Adds additional categories of (bad
actors) that cannot conduct an exempt
private offering under Rule 7?D

"rder of state securities, banking or similar

regulator*
;ars person from engaging in securities,
insurance, banking, savings association or credit
union activities, or
Is a final order in connection with fraudulent,
manipulative or deceptive conduct /8? years0

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96
=Accredited *nvestor>
Wh# is this im"ortant4
4o limit on the number of accredited
investors in a private offering conducted
under Rules 7?7 and 7?D
Accredited investors do not need to be
provided the prescribed information about
the issuer and the offering re3uired by
Rule 7?8 under Regulation &

Audited financial statements

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97
Who is An Accredited *nvestor4
4atural person with individual or 5oint /with
spouse0 net worth exceeding @8 million
4atural person with income exceeding
@9??,??? in last 9 years /@:??,??? with
spouse0 and reasonable expectation of same in
current year
&irector, executive officer or general partner of
the issuer or the general partner of issuer

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98
Who is An Accredited *nvestor4
continued
;ank, registered brokerBdealer, insurance
company, registered investment company,
business development company or small
business investment company
$ertain other entities

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99
=Accredited *nvestor>
Chan)es to the Definition
As of Quly 98, value of primary residence
excluded from net worth calculation
"therwise net worth standard remains at
@8,???,??? for four years
!+$ to review the other standards for natural
persons and may modify as appropriate
!+$ to review and ad5ust the definition every
four years after initial four-year period
/natural persons0

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100
Disclosure and Cor"orate
$overnance Provisions
of the Dodd-Frank Act
!tockholder votes on executive compensation
Additional executive compensation disclosure
Heightened compensation committee
standards for listed companies
$lawback policies for listed companies
Permitted hedging

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101
Disclosure and Cor"orate
$overnance Provisions
of the Dodd-Frank Act
continued
+xemption from auditor attestation
re3uirements of internal control over financial
reporting
Proxy access

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102
Stockholder Iotes on .ecutive
Com"ensation
!ay on pay

4on-binding vote on executive compensation

!tockholders vote how often held /8, 9 or :

years0
!ay on golden parachutes

($lear and simple) disclosure of payments to

named executive officers
!+$ can exempt certain issuers or
classes of issuers

'ust consider whether re3uirements

(disproportionately burden small issuers)

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103
Additional Com"ensation
Disclosure
Pay vs= performance

Relationship between executive compensation

and financial performance
!tock price, dividends

<raphic representation permitted

$+" pay vs= employee pay

'edian annual compensation excluding $+"

Annual compensation of $+"

Ratio

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104
Com"ensation Committees of
&isted Com"anies
Increased independence standards
Authori1ed to retain or obtain the
advice of compensation consultants,
legal counsel and other advisors in its
sole discretion
All such advisors must be
independent

www.ober.com
105
Com"ensation Committees of
&isted Com"anies continued
&irectly responsible for the
appointment, compensation and
oversight of such consultants or
advisors
$ompany must provide funding

www.ober.com
106
Ado"tion of =Cla3'ack> Polic#
?listed com"aniesA
Policy to recover (excess) incentive pay paid
to current or former executive officers
&uring three-year period
;efore an accounting restatement
&ue to material noncompliance with any
financial reporting re3uirement under the
securities laws

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107
Ado"tion of =Cla3'ack> Polic#
?listed com"aniesA continued
4o misconduct on part of issuer or executive
officers is re3uired
&isclosure of policy re3uired

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108
Com"ensation Standards for
Financial *nstitutions2 etc.
%ederal financial regulators to establish
standards to prohibit incentive-based
compensation arrangements that

+ncourage inappropriate risks by providing

excessive compensation, fees or benefits, or

$ould lead to a material financial loss

;anks with assets of less than @8 billion
exempt
Recent Interagency %inal <uidance on
Incentive $ompensation still applicable

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109
(ther
Permitted hedging by employees and directors
&isclosure of the reasons the company has
chosen to have the same or different persons
serve as $hairman and $+"
;rokers and other record holders cannot vote
shares without instructions - sa# on "a#,
compensation, other (significant matters)
Authori1es !+$ to adopt proxy access, and
exempt certain issuers

(P disproportionately burdens small issuers)

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110
Whistle'lo3er Provisions
+xpanded to persons who provide
original information on any securities
law violation
.eads to the successful enforcement of
any 5udicial or administrative action by
the !+$
Resulting in monetary sanctions over @8
million

www.ober.com
111
Whistle'lo3er Provisions
continued
8?>-:?> of collected monetary
sanctions
Prohibition against retaliation

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112
.em"tion from Auditor
Attestation of *nternal Controls
Re;uirement
!ection E?E/a0 of !arbanes-"xley re3uires !+$
reporting companies to maintain, evaluate and
report on (internal control over financial
reporting)
!ection E?E/b0 re3uires that companiesA
auditors review and attest to the companyAs
internal control over financial reporting
!maller reporting companies /public float less
than @K7 million0 exempted from auditor
attestation re3uirement

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113
=*nternal Control (ver Financial
Re"ortin)>
Process designed by, or under the supervision
of, the issuerRs principal executive and
principal financial officers, or persons
performing similar functions, and effected by
the issuerRs board of directors, management
and other personnel, to provide reasonable
assurance regarding the reliability of financial
reporting and the preparation of financial
statements for external purposes in

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114
=*nternal Control (ver Financial
Re"ortin)> continued
accordance with generally accepted accounting
principles and includes those policies and
procedures that*

Pertain to the maintenance of records that

in reasonable detail accurately and fairly
reflect the transactions and dispositions of
the assets of the issuerF

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115
=*nternal Control (ver Financial
Re"ortin)2> continued

Provide reasonable assurance that

transactions are recorded as necessary to
permit preparation of financial statements
in accordance with generally accepted
accounting principles, and that receipts and
expenditures of the issuer are being made
only in accordance with authori1ations of
management and directors of the issuerF
and

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116
=*nternal Control (ver Financial
Re"ortin)2> continued

Provide reasonable assurance regarding

prevention or timely detection of
unauthori1ed ac3uisition, use or disposition
of the issuerRs assets that could have a
material effect on the financial statements=

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117
valuation of *nternal Control
(ver Financial Re"ortin)
$ommittee of !ponsoring "rgani1ations
of the #readway $ommission )nternal
Control*)nterated Frame+ork /8CC90
Qack Anderson, Rowles H $ompany ..P

www.ober.com
118
*m"rovin) Access to
1ainstream Financial
*nstitutions
Title @**

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119
(+ncourage initiatives for financial
products and services that are
appropriate and accessible for
millions of Americans who are not
fully incorporated into the financial
mainstream)
Accomplished via two main
programs to be established by
!ecretary of the #reasury
Pur"ose of Title @**

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120
."anded Access to 1ainstream
Financial *nstitutions
+nable low- and moderate-income individuals to
establish accounts at federally insured financial
institutions that (are appropriate to meet the
financial needs of such individuals) on terms
that are (reasonable) for them
+ntities that participate may, but are not
re3uired to, provide such individuals with
services related to their accounts

!mall-dollar value loans

%inancial education and counseling

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121
&o3-Cost Alternatives to Small
Dollar &oans
Provide low-cost, small loans as alternative to
(more costly) small- dollar /i=e= payday0 loans
!uch loans must be made on (terms and
conditions) and (pursuant to lending
practices) that are (reasonable for
consumers)

www.ober.com
122
&o3-Cost Alternatives to Small
Dollar &oans continued
Recipients of grants for this program must
take steps to promote financial literacy and
education to loan recipients

$ounseling services

Gealth building programs

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123
&oan-&oss Reserve Funds
$rants
%rom #reasuryAs $ommunity
&evelopment %inancial Institutions
%und /$&%I %und0
#o establish loan loss reserve funds to
mitigate losses of small dollar loan
programs

$annot use to provide direct loans

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124
&oan-&oss Reserve Funds
$rants continued
'ust provide non-%ederal matching
funds in an amount e3ual to 7?> of
grant
<rants for technological assistance

#echnology, staff support, other costs

associated with establishing program