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Financial Overhaul Bill and What it Means for Consumers

10:39 AM, Jun 29, 2010   |    comments
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WASHINGTON, D.C. -- Perhaps you heard that last week - a new financial overhaul bill passed in committee in Congress and you hit the snooze button.  But there are plenty of reasons to wake up and pay attention to this bill.  If it becomes law, it would give you more protection, and possibly change your habits when you shop. 

NEW CONSUMER AGENCY CREATED

The bill creates a new consumer agency - a consumer cop on the beat - that will set rules to curb unfair practices in loans, credit cards.  But, auto dealers are not included.  They successfull argued they had nothing to do with financial meltdown.  Consumer groups said including them in the oversight would protect consumers from abusive lending practices, since the number one consumer complaint relates to auto dealers.

CREDIT SCORES AND YOUR RIGHTS

If you are turned down for a loan, you would be entitled to receive a copy of the credit score the lender used to make the decision.  But unlike - credit reports that you can get for free, once a year, from all the credit reporting agencies, you will still need to pay for your credit score.  The housing market tanked, in part, over loans that were issued to borrowers who couldn't pay.

NO MORE 'LIAR' LOANS

Now, lenders must document your income and verify that you can pay it back, before they originate a loan.  And, if it's an adjustment rate mortgage - a lender would have to ensure that you can afford to pay the highest rate under the terms of the loan.  If you have good credit, and you are an unemployed homeowner, you will be eligible for low interest loans to avoid foreclosure.

DEBIT, CREDIT AND INTERCHANGE FEES

When it comes to credit and debit cards, watch what happens with so-called "interchange fees."  Those are fees the bank pays each time you swipe your debit card.  Retailers may start giving you a discount for using cash.  And, they could require you to make a minimum purchase of 10 dollars before you could use your credit card.

This is just a snapshot of what the bill could mean for you.
The full House takes up the bill Tuesday.  It's not clear yet when the Senate will.  But the goal is to get this bill passed and on the president's desk by July 4th.

Gannett ContentOne - Washington, D.C.

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