A covered financial company is a type of financial institution that has been identified as needing special regulatory oversight. This designation is made under specific provisions of U.S. law, particularly in the context of financial stability and consumer protection. It is important to note that this term excludes insured depository institutions, which are banks that have insurance on deposits.
The term "covered financial company" is primarily used in the context of financial regulation and oversight. It is relevant in areas such as banking law, consumer protection, and financial reform. Legal practitioners may encounter this term when dealing with cases related to financial stability, liquidation processes, or regulatory compliance. Users can manage related legal matters using templates and forms provided by US Legal Forms, which are drafted by qualified attorneys.
Here are a couple of examples of abatement:
One example of a covered financial company could be a large investment firm that has been deemed to pose a risk to the financial system due to its size or interconnectedness with other financial institutions. This firm may be subject to additional regulatory scrutiny to prevent potential failures that could impact the broader economy.
(hypothetical example) Another example might involve a financial services company that, after a thorough assessment, is classified as needing special oversight due to its complex financial products and significant market presence.
The primary statute governing covered financial companies is the Dodd-Frank Wall Street Reform and Consumer Protection Act, specifically sections related to orderly liquidation authority. This law was enacted in response to the 2008 financial crisis to enhance the regulation of financial institutions and protect consumers.
| Term | Definition | Key Differences |
|---|---|---|
| Covered Financial Company | A financial institution needing regulatory oversight. | Excludes insured depository institutions. |
| Insured Depository Institution | A bank or credit union that has deposit insurance. | Not subject to the same oversight as covered financial companies. |
| Systemically Important Financial Institution (SIFI) | A financial institution whose failure could trigger a financial crisis. | May include covered financial companies but is broader in scope. |
If you believe you are dealing with a covered financial company, it is important to understand your rights and obligations. You may want to consult with a legal professional who specializes in financial law for tailored advice. Additionally, you can explore US Legal Forms' templates to help navigate any necessary legal processes effectively.
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| Attribute | Details |
|---|---|
| Jurisdiction | Federal law under the Dodd-Frank Act |
| Exclusions | Insured depository institutions |
| Regulatory Authority | Federal Reserve and other regulatory bodies |
A covered financial company is a financial institution identified by federal regulators as needing special oversight to ensure financial stability.