The Senate passed the Wall Street Reform and Consumer Protection Act by a vote of 60-39 on Thursday afternoon, sending the most sweeping financial reform bill since the Great Depression to the White House, where President Obama is expected to sign it into law next week.
Passage of the bill gives financial regulators significant influence in shaping and implementing the new law and how it impacts a range of industries including trading and consumers shopping for mortgages and credit cards.
The broader legislation also takes on consumer issues, including a key Obama administration proposal to create an agency tasked with policing most financial products sold to consumers. Housed in the Federal Reserve, the Consumer Financial Protection Bureau has the independent authority to write and enforce rules for consumer lending in mortgages, credit cards and other financial products.
The bill also includes new consumer protections for reverse mortgages that Congresswoman Dina Titus (D-Nev) supported. “Thanks to a provision I fought to include, seniors will be protected from unfair and deceptive practices surrounding reverse mortgages, ensuring that in their golden years they do not lose their home and equity they built up through a lifetime of work,” she said in a statement.
Within the first year, the bureau is tasked with conducting a reverse mortgage study to determine any deceptive or abusive practices. It will 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.
When the new regulations will be implemented isn’t yet clear, but estimates range from 18 months to immediate compliance the day after the president signs the bill into law. Regulators face many challenges, the bill directs regulators to write 533 rules according to analysis from the US Chamber of Commerce.