President signs financial reform bill to aid consumers, block Wall Street excesses

As expected, President Obama signed the Wall Street Reform and Consumer Protection Act yesterday.

The act is the most significant change in federal regulatory policies of Wall Street and financial institutions since the Great Depression. It creates a new bureau to protect consumers and sets out rules to curb Wall Street excesses that could lead to another recession.

In a signing ceremony attended by members of Congress, consumer advocates, consumers, bankers, and federal officials, Obama said passing the bill was no easy task:

To get there, we had to overcome the furious lobbying of an array of powerful interest groups and a partisan minority determined to block change.

Obama said the financial industry is central to the nation’s ability to grow, to prosper, to compete, and to innovate:

This reform will help foster innovation, not hamper it. It is designed to make sure that everybody follows the same set of rules, so that firms compete on price and quality, not on tricks and not on traps.

He said the bill will curb unfair rate hikes for credit cards and huge bank overdraft fees. Other benefits for consumers:

With this law, we’ll crack down on abusive practices in the mortgage industry. We’ll make sure that contracts are simpler – putting an end to many hidden penalties and fees in complex mortgages – so folks know what they’re signing.

With this law, students who take out college loans will be provided clear and concise information about their obligations.
 
And with this law, ordinary investors – like seniors and folks saving for retirement – will be able to receive more information about the costs and risks of mutual funds and other investment products, so that they can make better financial decisions as to what will work for them.

In addition to consumer protections, Obama said the bill will “rein in the abuse and excess that nearly brought down our financial system” and ensure that “the American people will never again be asked to foot the bill for Wall Street’s mistakes.”

For more information on the new law, see “How Does the Wall Street Reform Bill Benefit Consumers?"

Copyright 2010, Rita R. Robison, Consumer Specialist