Financial Edge: The Wall Street Reform Act – What You Need to Know
The Financial Edge has a bill summary here that gives a good explanation of what the Dodd-Frank financial reform bill will accomplish. Here’s what they say about the new consumer regulations (visit their website for the full list):
The Act creates a new Consumer Financial Protection Bureau (CFPB) under the Federal Reserve (Fed). The CFPB is responsible for consumer financial education, creating financial curriculum and making it available to the public. It will have the power to create and enforce new rules for just about every type of financial transaction in which consumers engage, including: home loans, credit cards, bank accounts, car loans, payday loans and others. The new rules carefully monitor how these products and services operate, and how they are sold. The CFPB’s power is daunting, and has nervous financial institutions scrambling.
The Impact: The Act protects the public from scams and insures quality financial services are available, and fairly priced, in all communities. It even stipulates diverse staffing of financial institutions. Financial organizations from credit unions and mortgage companies to debt collectors will be under constant oversight by the CFPB providing consumers with peace of mind.
Americans will have more reliable information about their finances in easy-to-understand English (maybe Spanish, too?). Topics like credit scores, risk, fees and penalties will be more clearly defined, giving purchasers more control over their money. Informed consumers are less likely to become fraud victims. If something goes awry, you will have one point of contact for help.
Consumers may find changes to the way their existing accounts work. For example, your bank may stop automatically charging overdraft fees, and instead decline overdrawn charges. It may be more difficult to qualify for a loan, but you will be more likely to afford it. Financial organizations will have to be more creative to make a profit, so you may find new services (offered for a fee of course).
What You Should Do: Pay attention to the details of financial transactions; ask questions and comparison shop. You can no longer assume that the accounts you currently have will work the same or cost the same. If you haven’t received letters from your financial institutions – you will. Make sure you understand the changes.Tags: final bill