What Is Banking and Finance Law?

Created by FindLaw's team of legal writers and editors | Last

updated October 08, 2020
Banking and Finance Legal Issues
The banking and financial industries are heavily regulated by both
state and federal law. These laws impose reporting requirements
for banks and other financial institutions, govern securities and
other transactions, and regulate taxes. In addition to affecting
banks, banking and finance law often plays a large role in mergers
and acquisitions of corporations, stock purchases and investments
by both individuals and companies, and tax audits of bank
accounts.
Many people find they need legal help with banking and finance law
when forming a new business. There are many laws, contracts, and
regulations that may dictate how new business spend and account
for investment funds. That's why many small businesses and
startups find they need to hire a lawyer from the beginning to
ensure compliance with all legal rules.
Terms to Know
 Security - A financial asset, such as a mortgage, provided to
make certain that a debt obligation is fulfilled
 Federal Deposit Insurance Corporation (FDIC) - A federal
agency that insures bank accounts in the event of theft,
supervises banking institutions to prevent mismanagement of
funds, and manages receiverships
 Receivership - A legal process where the government seizes a
failing bank or other institution to ensure it does default on
loans or otherwise lose the money it owes
 Securities and Exchange Commission (SEC) - A federal agency
that regulates investments and enforces disclosure and
compliance laws related to publicly traded securities
 Consumer Financial Protection Bureau (CFPB) - A federal
agency that enforces consumer financial protection laws
ranging from credit card regulations to hidden banking fees
 Federal Reserve - The central bank of the United States, which
regulates currency and controls interest and inflation rates in
order to create a stable monetary system