Which regulatory framework governs banks in the United States?

The Dodd-Frank Wall Street Reform and Consumer Protection Act plays a crucial role in shaping the regulatory environment for banks in the United States. Enacted in response to the 2008 financial crisis, this comprehensive legislation aims to improve financial stability and enhance consumer protection. It established several key regulatory bodies and introduced measures intended to mitigate risks associated with banking practices.

For instance, the Dodd-Frank Act created the Consumer Financial Protection Bureau (CFPB) to oversee and enforce consumer protection laws, ensuring that consumers receive fair treatment in the financial sector. Additionally, it implemented stricter capital requirements for banks, aimed at reducing the likelihood of systemic failures.

While the other options mentioned are important regulatory frameworks or laws related to finance and banking, they do not govern banks in the same overarching manner as the Dodd-Frank Act. The Basel III Framework, for example, is an international standard that deals with bank capital adequacy but is not a U.S. law itself. The Gramm-Leach-Bliley Act focuses primarily on the deregulation of the financial services industry, allowing banks to re-enter markets previously barred to them. The Sarbanes-Oxley Act is primarily concerned with corporate governance and accounting practices for publicly traded companies rather than directly regulating banking institutions