With the passage of a financial overhaul bill, credit cards and other consumer financial products will undergo a makeover. Here's a look at what's in the bill for consumers:
What do the changes mean for consumers?
The legislation will create broad changes, from making credit card terms more clear to calling for new mortgage regulations. But the changes won't happen overnight.President Obama said of the overhaul, which was a year in the making: "Because of this reform, the American people will never again be asked to foot the bill for Wall Street's mistakes." Here is a summary right in here and more in here. Here is more summary right in here and here. right in here and here. right in here and here. right in here and here.
July 16, 2010 at 4:31AM
PROTECTIONS FOR CONSUMERS
The law creates a Consumer Financial Protection Bureau at the Federal Reserve. The new agency will consolidate consumer protection duties previously handled by multiple regulators for banks and credit unions with $10 billion or more in assets. The watchdog will have jurisdiction over mortgage-related businesses, such as servicers, non-bank lenders and mortgage brokers; student lenders; payday lenders; and large debt collection agencies. The new agency will also set up a toll-free hot line for consumers to report problems with financial products.
START CARRYING CASH
Retailers are likely to offer discounts for paying with cash, said Ed Mierzwinski, director of the Consumer Program at the U.S. Public Interest Research Group, a consumer advocacy federation. Retailers like cash because they don't have to interchange fees to banks for credit card transactions. The legislation offers a break to business by specifically allowing retailers to offer discounts to those who pay cash.
MINIMUM CREDIT CARD PURCHASE
The bill allows retailers to require a minimum $10 purchase. The upshot for consumers? Again, carry more cash for small purchases.
CLEARER CREDIT CARD RULES
Consumers should notice that credit card contracts should be less confusing, as the new bill should lead to simplification of products' terms and conditions.
CREDIT SCORES
Gives consumers free access to their credit score in the event their ranking hurts them in a hiring or financial transaction.
FOR HOMEOWNERS AND RENTERS
The bill tells regulators to write a series of new mortgage regulations including a simple federal standard to ensure loans are repaid; bans on incentives that encourage the sale of high-cost loans; a prohibition on pre-payment penalties; penalties for irresponsible lending; requiring consumer disclosure of the maximum payment amounts under variable rate mortgages with a warning that payments fluctuate under such loans with interest rates. Also, an Office of Housing Counseling will be established at the Department of Housing and Urban Development to encourage home ownership as well as provide counseling for rental housing. The bill provides $1 billion in bridge loans to qualified unemployed workers to avoid foreclosure.
FOR STUDENTS
It creates a student loan ombudsman to track complaints and practices for private student loans.
WHAT'S NEXT
Treasury Secretary Timothy Geithner, within 60 days after the bill's enactment date, must designate a date to transfer many consumer financial protection powers to the new bureau. The transfer must occur between six and 18 months of enactment. Once the bureau is up and running, writing rules could take months.
NEWS SERVICES
about the writer
His political views differed from a transgender classmate’s, but they forged a bond that lasted a decade — until Vance seemed to pivot, politically and personally.
