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Financial reform bill is good news for consumers

Print Posted by Jill Boynton June 28, 2010 10:50 AM

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Lawmakers have been working hard to come together on a financial reform bill, and on Friday finished crafting their joint version. If passed, President Obama plans to sign it into law on July 4th (it’s still not certain the bill will pass, as the death of Senator Byrd puts the majority vote in question.)

The bill is good news for consumers. It contains several provisions aimed directly at protecting consumers, including the creation of a Consumer Financial Protection Bureau whose role is to create laws to prevent unfair practices in consumer loans and credit cards. Another important feature of the law is a ban on no-income mortgage loans; lenders would be required to verify a borrower’s income before approving the loan. The law would also cap debit card “swipe fees”, the fee retailers pay to banks for the ability to accept debit cards.

Another important feature is a new low-interest loan for unemployed homeowners with good credit, using funds from the Troubled Asset Relief Fund. Other provisions of the bill related to mortgages include limits on mortgage origination fees and prepayment penalties and a prohibition on bonuses lenders earn based on the type of loan they sell.

Stay tuned for more about the financial reform bill as it is finalized.

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About the contributors

Andrew Chan is the founder of Integrative Financial Advisors in Framingham. He provides comprehensive financial planning advice and investment management services. He has been an adviser for over 12 years and works with clients to integrate all aspects of their finances including investments, retirement, education funding, and tax planning.

Cheryl Costa is a managing director at AFW Wealth Advisors, which has offices in Natick and Purchase, N.Y. She advises clients on investing, education funding, and estate planning. She holds a master’s in business administration from Boston University.

Jamie Downey has been an accountant for more than 14 years. He's a partner at Downey & Co. in Braintree. Prior to joining the firm, he served as a manager in the audit department of accounting firm KPMG.