Changesmandated by the Dodd-Frank Bill are starting to emerge as the FDIC announcesthe establishment of the new Office of Complex Financial Institutions (CFI) andDivision of Depositor and Consumer Protection (DCP).
The intent of the new organization is tobring order to the increasingly complex set of rules and regulations in placeto protect consumers and the financial institution industry.
Critics claim that adding new oversight willnot solve systemic problems that could have been prevented if the originaloversight organizations had been more vigilant.
Time will tell which argument is best.
The CFI will performcontinuous review and oversight of bank holding companies with more than $100billion in assets as well as non-bank financial companies designated assystemically important by the new Financial Stability Oversight Council. CFIwill also be responsible for carrying out the FDIC’s new authority under theAct to implement orderly liquidations of bank holding companies and non-bankfinancial companies that fail. The absence of such authority exacerbated therecent financial crisis, when such firms as AIG, Lehman Brothers, and BearStearns became insolvent.