Wall Street Reform Passes House, Senate Up Next

The US House of Representatives passed the Wall Street reform bill by a vote of 237 to 192 on Wednesday.

“It has been a long fight against the defenders of the status quo on Wall Street, but today’s vote is a victory for every American who has been affected by the recklessness and irresponsibility that led to the loss of millions of jobs and trillions in wealth,” said President Barack Obama in a statement.

The bill includes over 2000 pages and touches just about every part of the financial industry, including reverse mortgages.  Specifically, it creates a Consumer Financial Protection Bureau which has the independent authority to write and enforce rules about consumer lending in mortgages, credit cards and other financial products.

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Housed in the Federal Reserve, the bureau would be required to conduct a reverse mortgage study to determine any deceptive or abusive practices within one year.  It would also determine whether suitability standards are necessary, as well as safeguards to protect consumers from being sold reverse mortgages to fund inappropriate annuities, investments, and other financial products.

The bureau would also have the authority to issue regulations, orders, or guidance that apply to reverse mortgages prior to the completion of the study.

The bill now heads to the Senate where it’s not expected to see any action until July 12 at the very earliest.  The death of Democratic Senator Robert Byrd and cold feet among Republican allies has complicated efforts to round up the votes needed in the Senate according to Reuters.

House passes landmark financial reform bill