Last week Congress passed the Financial Reform Bill with 60 votes. The bill is expected to be signed into law. While this bill has many repercussions for big banking institutions such as regulating derivatives and bank transactions; it will also have a big effect on individuals as well.
Here are 5 ways that the financial reform bill will benefit you.
No More Liar Loans
Financial reform means the end of all liar loans. Liar loans are loans that require no written documentation. They gained their name from the fact that many borrowers would lie and overstate their income and employment history so that they could obtain larger loan amounts. Many of these liar loans went bad and led to numerous foreclosures and declining property values.
No More Prepayment Penalties
Have you been considering paying off your mortgage loan off early? If so, there is good news. Banks can no longer charge you massive fees for paying your loan off in advance. Hopefully this will encourage more people to get out of debt faster. It never made any sense that banks were allowed to penalize borrowers for making wise financial decisions.
Capping Of Interchange Fees
Interchange fees are the fees that Visa and Mastercard charge for you to swipe your debit card. Interchange fees can go as high as 2%. The federal government can now put a cap on the amount of interchange fees. Interchange fees are expected to be capped at 0.5%, thereby saving debit card users money.
Free Look At Credit Score
You know how you are entitled to get a free copy of your credit report once a year. Now you are entitled to get a free look at your credit score as well. You can get a sneak peak at your credit score if you are denied a job or a loan because of your credit. It currently costs over $50 to get a look at your credit score.
Financial Literacy Agency
Financial literacy is not taught enough in our country. Schools should teach financial literacy to students at an early age. Now the federal government is creating a national financial literacy agency to educate young and old on financial matters. Topics will include, saving money, investing, loans, and managing debt.