How Financial Reform Will Affect Consumers

Predicting the impact of the just-signed legislation

Financial regulatory reform, signed today by President Obama, is now officially a reality. But what's really in the 2300 page behemoth? Well, that largely depends on where you ingest your news (if you want to watch the White House infomercial, click here). Here are pundits' first takes on how the legislation will affect consumers:

• Insurance Firms Are Visibly Relieved  that they "mostly dodged" substantial federal oversight, observes Jay MacDonald at Bankrate.com. "For now, Congress decided that if insurance ain't broke, don't fix it," he writes, before noting some minor tweaks (the creation of a Federal Insurance Office to monitor "systemic risks") that are forthcoming with the bills passage.

• Can It Narrow The Black-White Wealth Gap?  ponders Cord Jefferson at The Root, who interviews economics expert Dalton Conley. "I think it's always going to be the case that the rich are going to get richer and the poor are going to get poorer," Conley responds. "And yes, you can slow down that process-- and financial regulation will help slow that process-- but everything is a double-edged sword. If we're more cautious in the credit markets, it's going to be harder for minority businesses to get loans in the inner city, and it's going to be harder for first-time home buyers."

• It Destroys Financial Privacy  fumes former Presidential candidate Bob Barr in an Atlanta Journal Constitution blog post."Thanks to this financial services “reform” law, federal bureaucrats will have ready access to virtually every financial transaction that will take place in the country — from the largest bank acquisition to the smallest ATM withdrawal." This invasion of privacy is possible because, "in order for the government to figure out if the system is running 'fairly, transparently and competitively,' it has to be able to monitor all the myriad services and transactions which banks and other financial services entities offer."

• Won't Prevent Another Crisis  stresses William K. Black at CNN Money. "The bill does not address the problematic nature of modern executive and professional compensation even though the data shows that these are leading causes of the Great Recession. The percentage of executive compensation tied to short-term reported income has increased since the crisis, according to an independent study by James F. Reda & Associates."

• Banks Are Not Your Mother  explains MarketWatch writer David Weidner as he documents what the bill "forgot". "Bottom line: Regular people don't get bailouts. If you can't afford the loan, don't think the bank cares enough not to lend you the money. They don't. You need to be your own risk manager."