A Quick Look at the New Financial Reform Bill

May 20 2010 - The senate has passed a financial reform bill.
This bill is reminiscent of the restraints imposed during the Great Depression.
From Wall street CEO'S to small town lenders, to first home buyers the reform will have an effect in an unfavorable manner.
The restrictions on home purchasers will be more stringent.
This new measure is to protect the economy and the public at large.
It will cover not only home mortgages but credit cards, student loans, complex securities, and more.
The bill will have to pass through the House before it can be implemented but as it now looks the bill should pass the house by the 4th of July.
What it could potential mean for consumers, it will be harder to get a credit card, home mortgage, car loan, and tougher for college students to have a credit card.
But we would gain a new consumer protection agency, whose duties have not been outlined as of yet.
This new reform will also make easier to liquidate large failing banks.
Something the government is currently dealing with, large failed banks and the difficulty in liquidating their large portfolios.
The legislation to protect us will make it harder on the average American desiring the dream of home ownership.
But it will protect us from the recent Goldman Sachs type of issues where they knew they were selling and endorsing a risky investment that would in turn make them sizable profits during a time of down turn in the market.
Possibly the saddest point of the reform is that it will be up to regulators such as the Securities and Exchange commission to have clearer guidelines and authority to deal with hedge funds.
Conversely, according to the former SEC chairman Harvey Pitt this new bill is setting the commission up for failure.
It is a question of manpower issues for the new load on the SEC that will have to take the mantel of regulator when this new reform takes place.
We will all have to embrace a new system and with this new system it brings many unwanted and needed changes.
The once unpopular creative financing will be one alternative for people with less than stellar credit, and may also become more useful to those with great credit.
Conventional lending is going to change to a more strict practice that is intended to help the American consumer but many feel it will only hamper and make the current economy worsen.