BB&T 2010 Annual Report Download - page 32

REGULATORY CONSIDERATIONS
The following discussion describes elements of an extensive regulatory framework applicable to bank holding
companies, financial holding companies and banks and specific information about BB&T and its subsidiaries.
Regulation of banks, bank holding companies and financial holding companies is intended primarily for the
protection of depositors and the Deposit Insurance Fund (the “DIF”) rather than for the protection of
shareholders and creditors. As described in more detail below, comprehensive reform of the legislative and
regulatory landscape occurred during 2010 with the passage of the Dodd-Frank Wall Street Reform and
Consumer Protection Act (the “Dodd-Frank Act”). In addition to banking laws, regulations and regulatory
agencies, BB&T and its subsidiaries and affiliates are subject to various other laws and regulations and
supervision and examination by other regulatory agencies, all of which directly or indirectly affect the operations
and management of BB&T and its ability to make distributions to shareholders.
BB&T and its subsidiaries’ earnings are affected by general economic conditions, management policies,
changes in state and federal laws and regulations and actions of various regulatory authorities, including those
referred to in this section. Proposals to change the laws and regulations to which BB&T and its subsidiaries are
subject are frequently introduced at both the federal and state levels. The likelihood and timing of any such
changes and the impact such changes may have on BB&T and its subsidiaries are impossible to determine with
any certainty. The description herein summarizes the significant state and federal laws to which BB&T and its
subsidiaries currently are subject. To the extent statutory or regulatory provisions are described in this section,
such descriptions are qualified in their entirety by reference to the particular statutory or regulatory provisions.
Financial Regulatory Reform
On July 21, 2010, President Obama signed the Dodd-Frank Act into law. The Dodd-Frank Act is extensive,
complicated and comprehensive legislation that impacts practically all aspects of a banking organization,
representing a significant overhaul of many aspects of the regulation of the financial services industry. Although
many provisions remain subject to further rulemaking, the Dodd-Frank Act implements numerous and
far-reaching changes that affect financial companies, including banks and bank holding companies such as BB&T,
by, among other things:
• Requiring regulation and oversight of large, systemically important financial institutions by establishing
an interagency council on systemic risk and implementation of heightened prudential standards and
regulation by the Board of Governors of the Federal Reserve System (the “Federal Reserve”) for
systemically important financial institutions (including nonbank financial companies), as well as the
implementation of the Federal Deposit Insurance Corporation (the “FDIC”) resolution procedures for
liquidation of large financial companies to avoid market disruption;
• applying the same leverage and risk-based capital requirements that apply to insured depository
institutions to most bank holding companies, savings and loan holding companies and systemically
important nonbank financial companies;
• limiting the Federal Reserve’s emergency authority to lend to nondepository institutions to facilities
with broad-based eligibility, and authorizing the FDIC to establish an emergency financial stabilization
fund for solvent depository institutions and their holding companies, subject to the approval of
Congress, the Secretary of the United States Department of the Treasury (the “U.S. Treasury”) and the
Federal Reserve;
• centralizing responsibility for consumer financial protection by creating a new independent agency, the
Consumer Financial Protection Bureau (“CFPB”), with responsibility for implementing, enforcing and
examining for compliance with federal consumer financial laws;
• creating regimes for regulation of over-the-counter derivatives and non-admitted property and casualty
insurers and reinsurers;
• requiring any interchange transaction fee charged for a debit transaction be “reasonable” and
proportional to the cost incurred by the issuer for the transaction, the Federal Reserve is required to
prescribe new regulations establishing such fee standards, eliminate exclusivity arrangements between
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