Tipsheet: Financial reform

The massive overhaul of the financial industry underway in Washington will affect consumers as well as Wall Street. To help you cover the impact in your area, we've put together some resources and suggestions to get you started.

The bill will affect everything from how financial firms operate to the kinds of mortgages banks can offer. While the details are still being worked out, some provisions are worth looking at now.

Both the House and Senate versions of the bill create a new consumer watchdog with the power to regulate financial products, including credit cards and mortgages. It's expected that lenders will have to provide more information to borrowers in a simpler form to protect them from unscrupulous lenders. The Consumer Federation of America calls that a big win for consumers. But American Bankers Association warns that everyone may pay higher fees for banking services to cover the cost of compliance with new regulations, which could put some small community banks out of business. Are those types of banks in your area really worried?

Small banks also are said to be concerned about a provision that could change the way you use plastic to shop. The Senate wants to limit the fees banks can charge businesses for accepting their debit cards. The National Retail Federation estimates those fees cost retailers at least $10 billion a year, so capping them could theoretically lead to lower prices.

The bill also would let businesses offer discounts for cash or for the use of specific credit or debit cards, presumably those that charge them the lowest fees.The community bank trade group, Independent Community Bankers of America, says that could put their members at a real disadvantage. The National Association of Federal Credit Unions also is opposed to the move.

How do small banks and businesses in your area feel about this? Would your local retailers really pass on savings to consumers? What do shoppers, home-buyers and realtors think of the changes coming their way?

Comments

Add Comment