RICHMOND, VA (WWBT) – Nearly two years after the entire banking system almost collapsed, President Barrack Obama recently signed the financial reform bill. In tonight's 12 On Your Side Alert, we take a look at what the changes mean for you.
The big win for consumers is the creation of a Consumer Protection Agency. Financial experts we talked to say while the bill is still new it appears to be good news when it comes to financial education and protecting your money.
The goal of the new law is to curb the excess on Wall Street and protect consumers.
"All told, these reforms represent the strongest consumer financial protection in history...in history," said President Obama.
The bill creates a new Consumer Protection Bureau charged with stopping scams and overseeing nearly every type of loan including mortgages. The watchdog agency will ensure home-buyers are qualified for their loans. Lenders will be required to provide credit scores for free.
"It is also going to make sure that anytime you go to get any type of loan that you understand what the APR is what the payments are going to be, for how long they are going to last and you are going to be able to know that you will be able to repay that loan," said Andrew Grasso with Clear Point Financial.
Merchants will be able to set a $10 minimum for credit card charges and offer discounts for cash, and bank overdraft fees and interest rates will be regulated.
Grasso says the bureau will ensure consumers understand what they are getting, and avoid buyer's remorse. But not everyone agrees -- critics say the new regulations won't stop another meltdown, and some business leaders say it's bad for business.
"What are the things that are going to put people back to work? It's assurance by the job creators; the access capital," said Tom Donohue with the U.S. Chamber of Commerce.
"Unless your business model depends on cutting corners or bilking your customers, you've got nothing to fear from this reform," said President Obama.
Grasso agrees with the president. He feels the new agency will also help combat scams targeting consumers.
"Anything that can be risky, the bureau can actually put a stop to it and take over that agency....if they see that is going to be any regulatory issues down the line or if it is going to cause another economic meltdown," Grasso said.
President Obama must still select someone to head the bureau which will no doubt be a political battle. The person will have tremendous power to regulate everything from credit cards to banks, to payday loans. Click here for more information about the new agency and law.