Today, President Obama signed into law the Restoring American Financial Stability Act - the most important regulatory overhaul of our nation's financial system since the reforms that led to 60 years of sustained growth after the Great Depression.
For eight years, Wall Street played Russian roulette with America's future while Republicans in Congress and President Bush looked the other way. This law ends bailouts for big Wall Street banks and protects consumers and the financial system from the damaging practices that got us into this mess.
- Clear and Accurate Financial Information: A new consumer bureau will ensure American consumers get the clear, accurate information they need to shop for mortgages, credit cards, student loans, and other financial products, and protect them from hidden fees, abusive terms, unfair terms and deceptive practices.
- Access to Your Credit Score: Consumers will now have free access to their credit score, if their score negatively affects them in a financial transaction or a hiring decision.
- End of Unfair Lending Practices: The financial incentives for subprime loans that encourage lenders to steer borrowers into more costly loans will be prohibited, along with the pre-payment penalties that trapped so many borrowers in unaffordable loans.
- Consumer Hotline: Creates a national consumer complaint hotline so consumers will have, for the first time, a single, toll-free number to report problems with financial products and services.
- Reduced Debit Card "Swipe Fees": Businesses can't be charged extra for debit card "swipe fees" beyond the cost of processing those transactions. This could save American small businesses billions of dollars each year, savings which can then be passed along to consumers in the form of lower prices.
- Trusted Investment Advice: Brokers who offer investment advice will have to act in the best interests of consumers, not their own financial interests.
- End of Mortgage Abuses: The law eliminates many of the hidden fees and abusive practices that trapped so many families with loans they could not afford to repay, resulting in record foreclosures.
- Emergency Mortgage Relief: Building on a successful Pennsylvania program, the law provides $1 billion for bridge loans to qualified unemployed homeowners with reasonable prospects for reemployment to help cover mortgage payments until they are reemployed.
- Banks Must Disclose Risk of Mortgages: Lenders must disclose the maximum a consumer could pay on a variable rate mortgage, with a warning that payments will vary based on interest rate changes.
- Expanded Consumer Protections for High-Cost Mortgages: The law expands the protections available under federal rules on high-cost loans -- lowering the interest rate and the points and fee triggers that define high cost loans.
10 Ways New Wall Street Reform Law Will Help You was also cross-posted to the House Democrats Blog