Banking law broadly incorporates laws that regulate how banks and other financial establishments conduct business. There is a multitude of federal, state, and local laws that a bank must comply with.
Attorneys undertake various functions pertaining to the creation, compliance, and enforcement of regulations.
Various federal bodies are in charge of monitoring banking laws. A financial institution or bank may fall under the purview of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), or the Office of the Comptroller of the Currency (OCC).
Banks must be cognizant of the federal as well as state laws that they must comply with. Many federal banking laws are located in chapter 12 of the US Code.
SBEMP (Slovak, Baron, Empey, Murphy & Pinkney) law firm, led by judicious and dedicated lawyers, provides professional legal advice and services to clients in Palm Springs, Palm Desert, Rancho Mirage, Inland Empire, Orange County, San Diego, New Jersey, New York, and surrounding communities and towns these parts of the nation.
The Emergence of Banking Laws
When the US economy grew in the 20th century, the influence of banks on the economy became a concern for American lawmakers. They reasoned that a struggling banking system impacts consumers and the public at large.
To make sure that banks conduct their activities in an honest and fair manner, lawmakers create banking laws. There are frequent changes in banking laws, and a bank law attorney should remain updated with the latest changes and expected legislations.
The Scope of Banking Regulations
Banking laws may help accomplish multiple objectives, including:
- Offer transparency to customers
- Decrease banking risk for customers
- Prevent banking system misuse for money laundering purposes
- Enable customers to bank in confidentiality
- Prevent other financial crimes
- Prioritize financial lending depending on economic and social needs
- Offer fair banking as well as equal opportunities for banking
- Prevent terrorism
- Develop transparent debt collection policies
- Make credit card agreements fair to consumers
- Prevent financial institutions from forwarding unfair loans to insiders such as officers and principal shareholders
- Allow customers to raise disputes in a reasonable manner
- Other objectives
Major Banking Laws
Many significant regulations in the US are now in place to control banking at the federal level. State and local banking laws are often secondary to federal banking regulations.
Overall, there are thousands of banking laws that banks need to comprehend and comply with. Some of the most significant banking laws in the US are as follows:
Banking Act of 1933
The Federal Deposit Insurance Corporation was established by the Banking Act of 1933. In the event of bank failure, the FDIC system offers insurance for customers.
Right to Privacy Act
This banking law is also known as Regulation P. This law regulates how banks utilize customer information. Banks must inform customers on their privacy policies as well as offer them an opportunity to choose whether they want to share their information or not.
Dodd-Frank Act of 2010
This Act comprises 1,500 separate items. This law was signed by President Barack Obama and created new laws for Wall Street. Banks now need to comply with nearly 400 new regulations due to this Act.
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