July 15, 2010
WASHINGTON — The Senate today approved a landmark bill to overhaul the rules for banks and Wall Street by a vote of 60 to 39. The bill, which passed the House on June 30, is now headed to the White House, where President Obama is expected to sign it into law next week.
Consumers Union, the nonprofit publisher of Consumer Reports magazine, enthusiastically endorsed the bill as a “game changer,” a much-needed reform package to prevent the abuses and irresponsible risks of those financial institutions that helped spark the economic crisis.
One of the bill’s most important measures is a new Consumer Financial Protection Bureau, which will oversee financial products and services such as mortgages, credit cards, payday loans, check cashing, and private student loans.
“Consumers need a watchdog on their side, and this one’s got some teeth,” said Gail Hillebrand, the director of Consumers Union’s Defend Your Dollars campaign for financial reform (www.DefendYourDollars.org). “Some of the problems that led to the economic meltdown could have been prevented if there had been a bureau like this one to stop consumer rip-offs.”
The bill cracks down on the fees that banks charge retailers when consumers use debit cards. Mortgage lenders are required to determine that borrowers have the ability to repay their loans, and prepayment penalties for mortgages are limited or eliminated. Under the bill all consumers are entitled to free credit scores when they are denied credit or charged a higher price for credit because of information in their credit reports. The bill also gives more leeway for state legislatures to restrict harmful practices of national banks.
“For consumers who have been beaten up by banking fees and rate hikes, this bill offers some sweet relief,” said Pamela Banks, senior policy counsel for Consumers Union. “This is a game changer. It’s a good, strong piece of legislation, and it’s a remarkable achievement for the policymakers who got it passed, because the banking lobbyists pulled out all the stops to oppose it. The financial industry fought long and hard to defeat it, but this time, the good guys won.”
David Butler or Kristina Edmunson, 202-462-6262
Michael McCauley, 415-431-6747