Financial Reform Law Aims to Change Some Ways of Wall Street
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This is the VOA Special English Economics Report.
On Wednesday, President Obama signed into law the Wall Street Reform and Consumer Protection Act.
BARACK OBAMA: "These reforms represent the strongest consumer financial protections in history -- in history."
Together, the changes represent the biggest rewrite of financial rules since the Great Depression. At the heart of the two thousand three hundred pages in the bill are promises to protect average Americans.
Congress agreed to create a Consumer Financial Protection Bureau. But the Federal Reserve will pay for it. The central bank will budget about five hundred million dollars a year.
Travis Plunkett is legislative director of the Consumer Federation of America, a consumer rights group. He says this new independent office will have a lot of responsibility -- and that is a good thing.
TRAVIS PLUNKETT: "We're going to have one federal consumer financial protection bureau. If it succeeds, people will know it. If it fails, people will know it. And they will try to hold it accountable."
The bureau will set rules for the marketplace and enforce existing laws. One goal is to keep home buyers from getting bigger loans than they can pay for. But two areas where the bureau will not have power is over auto lenders or banks with assets of less than ten billion dollars.
Financial interests spent millions fighting the bill. The House of Representatives passed its version in December. Last week the Senate voted final approval with the aid of three Republican senators.
House Minority Leader John Boehner called the financial reform bill "ill conceived."
JOHN BOEHNER: "I think it’s going to make credit harder for the American people to get, clearly harder for businesses to get."
But President Obama says Wall Street took irresponsible risks that threatened the financial system.
Under the new law, banks no longer can own or invest in certain trading operations. The government has new powers to seize failing financial companies. These include businesses that, during the financial crisis, were considered "too big to fail."
And President Obama says the law does something else.
BARACK OBAMA: "Finally, because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes. There will be no more tax-funded bailouts. Period."
Regulatory agencies will write hundreds of new rules for banks and other financial companies. This follows years of deregulation.
Opponents in Congress say they will try to block some measures in the new law. But even if those efforts fail, it is too soon to know just how strong the new rules will be.
And that's the VOA Special English Economics Report, written by Mario Ritter. You can comment on our program at voaspecialenglish.com. And follow us on Facebook, Twitter, Youtube and iTunes at VOA Learning English. I'm Steve Ember. I'm Steve Ember.