Top 5 Transformations in the Financial Market

In order to give better protection to the consumers a new reform bill known as Dodd Financial Reform Bill has been introduced. The bill mainly centres the focus on regulating the financial institutions and vest more power to the Federal Reserve. The different credit and lending institutions are being monitored by a new organization.


The 5 Modifications are :


1. A new supervisor : The Consumer Financial Protection Bureau (CFPB) keeps a vigil over the lending institutions and the process. This new agency gives protection to the consumers from the evil business practices. The consumer education is also provided by the CFPB. He consumers can even lodge complaint against the illegitimate financial practices.




2. Guideline on private student loan : The consumers who apply for private student loans don’t enjoy the same protection that is provided by the government student loans. Therefore private student loan industry has come under a strict supervision of CFPB in order to safe guard the right of the consumers.


3. New regulation on mortgage lending : An interest rate of at least 5% should be levied on the loan as per the instruction given to the lenders according to the bill. The low income consumer group would find it difficult to apply for mortgage loan due to high interest rate. You need to provide evidence that you can afford to make payments on mortgage. Then you would be considered to be eligible to take mortgage loan. 


4. Regulation on credit and debit card : If you buy things of at least $10 or more then you can use the credit card or debit card under the new bill. If you purchase things less than $10 then the merchant may refuse to accept credit or debit card.


5. Free credit score : With the introduction of the new reform you have a free access to your credit score in case your application for a credit card or a loan is denied. You would get a free copy of your credit score with every denial in the loan application.