My Real Estate Blog

President Obama recently signed the landmark H.R. 4173: Restoring American Financial Stability (RAFS) Act of 2010 which, in part, eliminates many of the lax mortgage lending practices that sparked the financial meltdown.

Among its provisions, the far-reaching new law creates a new Federal Reserve-based watchdog, the Consumer Financial Protection Bureau to ensure consumers get clear, accurate information necessary to shop for mortgages, credit cards and other financial products. It also protects consumers from hidden fees, predatory terms and deception.

It's not clear when all the provisions will roll out, but an overwhelming majority of consumers demanded the protections.

Often called Wall Street Reform, the RAFS Act has many provisions for those who live on Main Street, including a national consumer complaint hotline so consumers will have, for the first time, a single, toll-free number to report problems with financial products and services; a new Office of Financial Literacy; and a new U.S. Department of Housing and Urban Development (HUD) Office of Housing Counseling to boost homeownership and rental housing counseling.

The bureau will be lead by an independent director appointed by President Obama and confirmed by the Senate, who will be able to autonomously write rules for consumer protections governing all financial institutions, banks and non-banks, offering consumer financial services or products.

The new director will oversee the enforcement of federal laws intended to ensure the fair, equitable and nondiscriminatory access to credit for individuals and communities.

The new law governs banks and credit unions with assets of over $10 billion and all mortgage-related businesses (lenders, servicers, mortgage brokers, and foreclosure scam operators), payday lenders, and student lenders as well as other non-bank financial companies, including debt collectors and consumer reporting agencies. Banks and credit unions with assets of $10 billion or less will be examined for consumer complaints by the appropriate regulator.