Personal Finance

Financial Reform Legislation: A Few Highlights

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The Restoring American Financial Stability Act of 2010 (S. 3217) is being debated in the Senate this week. A search this morning turned up 378 amendments proposed so far. Not all of these amendments will be voted on by the Senate, and even if they are passed, the House and Senate versions must be reconciled. But in the meantime, I thought I would highlight a few that I find of particular interest:

The Senate approved an amendment proposed by Assistant Senate Majority Leader Dick Durbin (D-IL) directing the Fed to issue rules to ensure that debit interchange fees, (or "swipe fees") are reasonable and proportional to the processing costs incurred has been passed by the Senate. Businesses that accept plastic have been pushing hard for legislation to regulate the “interchange” fee they pay when they accept debit and credit cards. This amendment would also allow merchants to impose minimum purchase floors when customers pay with debit or credit.

Yesterday, the Senate passed a compromise amendment sponsored by Sen. Thomas R. Carper (D-DE) that has left some consumer advocates concerned that state regulators will not be able to fully protect their citizens against financial abuses. It does, however, give state Attorney Generals the opportunity to play a role in enforcing rules developed by the Consumer Financial Protection Bureau.

Last week, the Debt Settlement Consumer Protection Act was introduced by Senator Charles Schumer (D-NY). It would crack down on abuses in the debt settlement/debt negotiation industry by requiring detailed disclosures and limiting fees. While we shared some concerns with Schumer’s staff over the specifics of the legislation, we agree that this industry has some serious problems that need to be addressed. This amendment, which I cover in more detail in another article, has not been considered yet so it may not end up in the final bill.

Some are predicting this legislation could be voted on as early as tomorrow. We'll be watching.

– Personal finance author and Credit Advisor for, Gerri contributes
budgeting, debt recovery and savings information online. She is also the
co-author of Reduce
Debt, Reduce Stress: Real Life Solutions for Solving Your Credit Crisis

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