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.