Learning Objectives:

  • Explain the structure of the US banking regulatory system.

  • Identify key US regulations governing digital banking.

  • Understand the role of US supervisory authorities.

3.1 The US Decentralised Regulatory System

The US banking system is characterized by a federal system driven by a clear division of powers between the central government and the states . This diversity is reflected in the regulatory structures and policies adopted in the banking sector . The US regulatory system is more decentralised than the EU’s, with competition between federal and state regulators .

3.2 Key US Banking Regulations

Key US banking regulations include [citation:1,9,12]:

  • Dodd-Frank Wall Street Reform and Consumer Protection Act: A comprehensive reform act passed after the 2008 financial crisis. Key provisions include the Volcker Rule (restricting proprietary trading), the establishment of the Consumer Financial Protection Bureau (CFPB) , enhanced supervision of systemically important financial institutions, and resolution authority for failing institutions .

  • Section 1033 of the Dodd-Frank Act: Establishes consumer rights to access financial data .

  • Gramm-Leach-Bliley Act: A key US data privacy law governing the collection and use of consumer financial information .

  • Cybersecurity Information Sharing Act (CISA): A US cybersecurity regulation that encourages information sharing about cyber threats .

3.3 US Supervisory Authorities

US banking supervision is conducted by multiple federal and state agencies:

  • Federal Reserve (The Fed): The central bank of the US, responsible for monetary policy and regulating bank holding companies .

  • Office of the Comptroller of the Currency (OCC): Charters, regulates, and supervises all national banks .

  • Federal Deposit Insurance Corporation (FDIC): Insures deposits and supervises financial institutions for safety and soundness .

  • Consumer Financial Protection Bureau (CFPB): Enforces federal consumer financial laws and protects consumers in the financial marketplace .

 

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