House Refinance Center
Financial Reform Bill
Financial Reform: What YOU
Need To Know

The Financial Reform Bill is law. It provides application of the federal laws protecting
consumers across a wide range of industries. From big banks to storefront
pawnbrokers, most companies are regulated. There are a few exceptions. There
was a lot of  give and take, and the Obama Administration delivered a Bill that was
long overdue.

Not all parties affected are doing back flips, and dancing in the streets. The credit
unions are not happy. They feel that the big banks  have a clear advantage over fees.

Banks, Credit Unions with assets less than $10 million.

The Federal Reserve will set the fees that large financial institutions charge.
Institutions with assets less than $10 million will be exempt. This covers most of the
community banks and credit unions. The credit unions are upset about this. In
particular the "interchange fees". These fees are charge anytime a consumer makes
a purchase using a debit or credit card. Merchants pay the fee, usually 1% to 3% of
the price of the product. The fee is paid to the financial institution that issued the
card, and all the companies that were involved in the transaction.

The credit unions feel that since large banks will be required to charge lower fees,
retailers will steer customers to the banks by offering in store specials and other
promotions.

Bob Arnould, senior V-P at the California Credit Union League, said that in the end,
consumers will pay because institutions, big and small will raise banking fees to
make up for the loss revenue from debit card revenue.

Wall Street

FDIC $250,000 limit

The Federal Deposit Insurance Corporation has raised the limit to $250,000 per
deposit account. If you have several different accounts at a bank, each account is
protected up to $250,000. For example, you might have a savings account, a
checking account and a Certificate of Deposit, (CD). Each will have insurance
protection of up to $250,000.

Puts an end to the notion that a company is too big to fail. Taxpayers will not be on
the hook for millions of dollars in bailouts. The bill creates an effective way to
liquidate failed financial institutions.

Mortgages

Mortgage brokers and lenders have to document your income. They have to take all
necessary steps to make sure that the borrower has the ability to repay the loan.

Failure to do so will result in penalties. The penalties can be as high a three years
interest payments, plus damages and attorney's fees.  Furthermore, a mortgage
broker can not receive a commission if he steers the borrower into a loan that will
create more income for the broker and higher rates for the borrower. This Bill makes
the payment of bonuses known as "yield spread premiums" illegal.

One of the features of the Reform Bill is housing counseling. An Office of Housing
Counseling will be created within HUD.
Financial Reform: This
Watchdog Has Teeth

This is the strong watchdog that will protect the American
consumer from deceptive and abusive financial practices.

Director
Appointed by the President and confirmed by the Senate.

Budget
Budget paid by the Federal Reserve Board.

Rule writing
Ability to write rules to protect the consumer. All institutions,
bank and non-bank are included.

Examination/Enforcement
Authority to examine and enforce regulations for banks and
credit unions with assets over $10 billion. Included in this
group of companies are mortgage lenders, mortgage
servicers, mortgage brokers, payday lenders, debt
collectors and consumer reporting agencies.

Consumer Hotline
Creates a national consumer hotline. A toll free number to
report problems or abuse.

Consumer protection
Consolidates the various agencies that protect the
consumer. Office of the Comptroller of the Currency, Office
of Thrift Supervision, Federal Deposit Insurance
Corporation, Federal Reserve, National Credit Union
Administration, and the Federal Trade Commission.
FHA       mortgage approval        nonprofit brokers       servicemembers       stated income          refinance calculator       downpayment        closing fees         bank owned (REO)
calculators          zero down mortgage          second mortgage          mortgage interest deduction          mortgage servicing          first time buyer          financial reform          fannie and freddie
Home          Credit          Foreclosure          Refinance          Hard money          Interest only mortgage          Loan modification          Shortsale          Reverse mortgage          Strategic default