How financial reform signed into law impacts consumers
President Barack Obama today signed the sweeping financial reform legislation into law.
What does that mean for consumers?
Credit score: It may be several months away before it is actually implemented, but consumers will now be provided the actual credit score lenders used if the consumer is denied a loan or approved with disadvantaged terms. This is applicable to lenders, insurance companies, landlords and retailers. So, if you apply for insurance and you’re told no, the insurance company must provide you with the score it used in making its decision. This gives the consumer greater insight and makes the lenders more transparent.
“It completely takes the guess work out of it,” said John Ulzheimer of Credit.com.
Mortgage lenders: Fraudulent loans may not be a thing of the past, but they just become more difficult to pull off. That’s because lenders must now verify the borrower’s ability to repay the loan. If lenders do not comply, they will face heavy penalties.
“It will change how lenders do business,” Ulzheimer said. “They have to have proof of income so they can justify your ability to pay back the bill. Before, people could make up whatever they wanted to say about their income.”
Debit card fees: Have you ever wanted to use your debit card, but couldn’t swipe unless you made a minimum purchase? Well, that’s because banks charge businesses for debit card transactions. In doing so, the merchant can’t afford to let every little purchase be made with a card. Now, the fees must be “reasonable and proportional to the cost incurred in processing the transaction.”
Retailers would be allowed under the bill to offer discounts to use cash. They can still set a minimum purchase amount to use cards, but the Federal Reserve would have the authority to set the minimum. This bill would set the minimum to start at $10, according to CBS News.
Here’s a piece-by-piece guide of the financial overhaul.
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11 comments Add your comment
Peadawg
July 21st, 2010
2:55 pm
That last sentence…so the minimum anywhere to use a debit card would now be $10?
roja
July 21st, 2010
3:10 pm
Another way it will affect you could be seen in the hours following his signing of the bill — the Market DROPPED over 100 points. In case you think this doesn’t impact the middle class, teacher’s unions are heavily invested in Stocks to fund your pension; most states and many cities and counties fund their employee retirement funds through investments in the stock market; many 401Ks are market based; most of the corporate retirement plans that remain are market based — just to name a few. Your future just took a big hit if you are a city, county, state or federal worker or a teacher just to name a third of the population………….
Consumer
July 21st, 2010
3:11 pm
Well – the resturant in the building where I work has a $5 minimum – so how does that help me? Idiots. Who are they trying to help? GET OUT OF MY WALLET!
Norman
July 21st, 2010
3:13 pm
My guess is both business and customers will be screwed so that politicians can gain power. The economy will be hurt a lot more than helped. I hope they let me continue to rake in over $750 a year in cash rewards and never pay any fees by paying every balance every month.
Consumer
July 21st, 2010
3:15 pm
“The law also assembles a powerful council of regulators to be on the lookout for risks across the finance system. Large, failing financial institutions would be liquidated and the costs assessed on their surviving peers. Borrowers will be protected from hidden fees and abusive terms, but also will have to provide evidence that they can repay their loans. The Federal Reserve will get new powers while at the same time coming under expanded congressional oversight.”
So, what does that mean – the government has the right to take over a PRIVATE BANK and sell off it’s worth – if they feel like it – if they think it’s is the right thing to do. WTH?
Guess we are not free any more.
Sad day.
John Doe
July 21st, 2010
6:57 pm
The last paragraph here is wrong. Until this financial reform was signed, retailers COULD NOT set a minimum amount to use credit cards. It is/was against the policies of the credit card companies. If you wanted to change 50 cents, you could. Please check yourself before you publish incorrect information.
OrionA
July 22nd, 2010
7:53 am
This is much needed regulation. Unscrupulous banks and lenders and no longer ‘free’ to rape and pillage…seems like a bad day for them and a good day for their victims.
Now these financial crooks may need to find a legitimate way to earn a buck.
“…lenders must now verify the borrower’s ability to repay the loan..” – what a novel idea. Geeez!
OrionA
July 22nd, 2010
7:54 am
That’s right, unscrupulous banks and lenders are no longer ‘free’ to hoodwink consumers into predatory contracts. Good day.
Jack Booted Thug
July 22nd, 2010
8:20 am
LOL…this law is nothing more than fluff and circumcision and the middle class and poor will be taking a good screwing. Atleast the middle class is intelligent to realize same, however, the ones crowing about the wonder of this latest boodoggle just dont get it and never will.
Example?
“‘free’ to hoodwink consumers into predatory contracts.” Really now. What a stupid statement. I bet you voted for OBlunder.
Rana Cash
July 22nd, 2010
11:21 am
@ Peadawg. The new federal allows retailers to reject your credit card purchase of under $10. And, they can charge cash, debit and check users less for the same item than they’d charge those using credit cards.
My Credit – Five Surefire Ways To Torpedo Your Credit Rating – istockAnalyst.com (press release)
July 26th, 2010
2:36 am
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