The Correct Answer and Explanation is:
Of course. Here is the correct answer and a detailed explanation of each agency’s role.
Correct Matches
- Financial Industry Regulatory Authority (FINRA): administers the official exams that brokers must pass.
- Financial Stability Oversight Council (FSOC): monitors big banks for risky behavior.
- Consumer Financial Protection Bureau (CFPB): prevents dishonest mortgage lending practices.
- Office of the Comptroller of the Currency (OCC): enforces the “Truth in Lending Act”.
Explanation
Each of these agencies has a distinct mandate within the U.S. financial regulatory framework, and their functions are tied directly to their core missions.
The Financial Industry Regulatory Authority, or FINRA, is a self regulatory organization that oversees the brokerage industry. Its primary function is to protect investors by ensuring that broker dealers operate fairly and honestly. A key part of this is establishing professional standards for brokers. This includes writing and enforcing rules, as well as developing and administering the licensing exams that individuals must pass to become registered securities brokers, such as the Series 7 exam. Therefore, it directly administers the official exams for brokers.
The Financial Stability Oversight Council, or FSOC, was established by the Dodd Frank Act following the 2008 financial crisis. Its purpose is not to regulate individual consumers or small firms but to take a high level view of the entire financial system. The FSOC’s main job is to identify and monitor excessive risks that could threaten the country’s financial stability. This includes designating large, interconnected financial institutions as “systemically important,” subjecting them to heightened supervision. This role perfectly aligns with monitoring big banks for risky behavior that could harm the broader economy.
The Consumer Financial Protection Bureau, or CFPB, was also created by the Dodd Frank Act with a single, clear mission: to protect consumers in the financial marketplace. Its creation was a direct response to the widespread predatory lending that contributed to the 2008 crisis, particularly in the mortgage market. The CFPB writes and enforces rules for financial products like credit cards, student loans, and mortgages, with a specific focus on preventing unfair, deceptive, or abusive practices. Consequently, its central function is to prevent dishonest mortgage lending practices.
The Office of the Comptroller of the Currency, or OCC, is a bureau within the U.S. Treasury Department that charters, regulates, and supervises all national banks and federal savings associations. As a primary bank regulator, the OCC is responsible for ensuring these institutions operate in a safe and sound manner and comply with all applicable laws and regulations. This includes the enforcement of key consumer protection laws, such as the “Truth in Lending Act” (TILA), within the banks it supervises.
