What type of loans are primarily regulated by the Dodd-Frank Act?

The Dodd-Frank Act primarily regulates residential mortgage loans as part of its broader mission to promote financial stability and accountability in the financial services industry. Enacted in response to the 2008 financial crisis, the Dodd-Frank Act introduced significant reforms aimed at protecting consumers from predatory lending practices and ensuring that mortgage products are offered fairly and responsibly.

Specifically, the act established the Consumer Financial Protection Bureau (CFPB), which oversees the implementation of consumer protection laws, particularly those that apply to residential mortgage lending. This includes regulations around loan disclosures, the ability to repay, and other critical elements that directly impact borrowers. By focusing on residential mortgage loans, the Dodd-Frank Act seeks to enhance transparency and safeguard borrowers against risks associated with subprime lending and other harmful lending practices.

In contrast, commercial loans, consumer loans that do not pertain to housing, and auto loans fall outside the primary scope of the Dodd-Frank Act's regulations, which are specifically tailored to protect individual homebuyers in the residential real estate market.