The final bill on reform of Wall Street.

The final bill on reform of Wall Street has yet not been ready but indications are there of what it will be after ironing out the differences. The underlying basic idea is to give protection to the consumers, stop corporate firms from becoming too big and to use the whip on bets that are dangerous for taxpayers.

An autonomous consumer agency – Consumer Financial Protection Bureau would set up but within the Federal Reserve. Bank fees would provide the funds for it. It would lay down the rules to stop unfair operations in loans and credit cards issued to customers. Auto dealers would not come under its ambit.

The bill would permit all the consumers to get one annual credit report without paying fees together with the real credit score.

The legislators want to hit out at debit card swapping fees. The new rules would regulate the transferring fees to reasonable proportionate limits.

Before granting a mortgage the income of the loan taker would have to be documented and verified by the lender. Those house owners who were unemployed but had good credit would qualify for loans carrying low interest to assist them in avoiding foreclosure. $1 billion would be earmarked for this – the funds coming from TARP.

More stringent rules would be laid down regarding products of life insurance wherein the client pays an upfront lump sum fee in lieu of a monthly income after a period of time. The SEC has been flexing its muscles to move in and demand more transparency regarding these products that are peddled to seniors. But the legislators barred SEC from taking more stringent measures.

An oversight council will be newly set up comprising of regulators to oversee the operations of the mega financial entities so that the financial system is not again endangered.

FDIC would be given new powers to pull down the mega financial bodies in the same way it deals with banks. Taxes would be imposed on banks to reimburse the government for the cost of resolving them if and when failure happens.

The Congress would be permitted to give orders to GAO to review Fed operations except monetary plans. Audit would take place two years after the Fed grants emergency loans to ailing financial entities.

The bill would also cover keeping of a credit risk balance of firms that deal with securities, impose taxes on the financial bodies for implementing the bill, make derivate trading more transparent, control swapping deals of mega banks, rein in betting and expect rating agencies to disclose their methods of operation. The pay offs to executives would be drastically cut.

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