WASHINGTON - Reveling in victory, President Barack Obama on Wednesday signed the most sweeping overhaul of financial regulations since the Great Depression, a package that aims to protect consumers and ensure economic stability from Main Street to Wall Street.
The law, pushed through mainly by Democrats in Washington's deeply partisan environment, comes almost two years after the near financial meltdown in 2008 in the United States that was felt around the globe. The legislation gives the government new powers to break up companies that threaten the economy, creates a new agency to guard consumers and puts more light on the financial markets that escaped the oversight of regulators.
Obama described them all as commonsense reforms that will help people in their daily life - signing contracts, understanding fees, being aware of risks.
He went so far as to call the reforms "the strongest consumer protections in history."
The president added to a burst of applause: "Because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes." Republicans portray the bill as a burden on small banks and the businesses that rely on them and argue it will cost consumers and impede job growth.
The president said otherwise. He argued that a crippling recession was primarily caused by a breakdown in the financial system that cannot happen again. Obama sought to put the complex law in consumer-oriented terms for the nation. He said it would help root out fine print and hidden fees for people and provide deeper scrutiny of the sophisticated financial transactions on Wall Street. Highlights of the new regulations OVERSIGHT: A 10-member council of regulators will monitor threats to the financial system, deciding which companies were so big or interconnected that their failures could upend the financial system. Those companies would be subject to tougher regulation. If such a company teetered, the government could liquidate it, with the costs borne by its industry peers.
CONSUMER PROTECTION A new independent office would oversee financial products and services such as mortgages, credit cards and short-term loans. For community banks, the new rules would be enforced by existing regulators.
FEDERAL RESERVE Would lead the oversight of big, interconnected companies whose failures could threaten the system. Those companies would be identified by the council of regulators. The Fed also would have to set lower limits on the fees that banks charge merchants who accept debit cards.
DERIVATIVES Most trading moves to more transparent exchanges. Banks will continue trading those related to interest rates, foreign exchanges, gold and silver. Riskier ones would run through affiliated companies with separate finances. - AP