WASHINGTON, July 15 /PRNewswire-USNewswire/ -- Consumer Watchdog applauded final Congressional passage today of the Wall Street Reform and Consumer Protection Act, which now heads to President Obama for his signature.

"Nearly two years after the financial crisis brought the nation's economy to its knees, this bill is a critical first step toward reversing the deregulatory excesses that culminated in the 2008 financial collapse. A strong new consumer regulator, transparency and accountability for Wall Street derivatives trading, and new limits on speculation by banks all target the abusive and risky practices that were root causes of the financial crisis.

"Nevertheless, there is more work to be done on the road to comprehensive financial reform. We must monitor implementation of the new law that leaves significant discretion in the hands of regulators. The fight will continue for stronger regulation, including stricter limits on bank size and leverage to ensure no bank will ever again be deemed 'too-big-to-fail.'

"This bill sets the wheels in motion to replace the failed deregulatory policies of the 1990s with real oversight of Wall Street," said Carmen Balber, Washington Director for Consumer Watchdog.

Bill highlights, and next steps to strengthen reform, include:

• Consumer protection: A first-of-its-kind regulator, whose sole job is consumer financial protection, will crack down on abusive lending and financial practices including mortgages, credit cards, payday loans and bank accounts. Mortgage reforms include requirements that borrowers provide evidence of their ability to repay mortgages, and prohibitions on compensating lenders for steering consumers into higher-cost loans. Strengthen reform by: Funding consumer participation in the new consumer bureau's proceedings.
• Accountable, transparent derivatives trading: Nearly all derivatives will have to be exchange traded and cleared, so trades have enough money backing them and regulators can spot problems before they threaten the entire economy. Commercial banks will be prohibited from trading in some of the riskiest swaps. Strengthen reform by: Closing the loophole to ban all swaps trading by taxpayer-backed commercial banks.
• "Volcker Rule": Limits banks' ability to speculate with taxpayer-insured deposits, and prohibits financial companies from betting against their clients. Strengthen reform by: Closing the loophole to ban all speculation with taxpayer-backed funds.
• Begins to tackle "too-big-to-fail" : Creates a new system to break up, rather than bail out, failing financial firms and make banks pay the bill. Strengthen reform by: Setting strict size and leverage limits, and rebuilding the walls between investment and commercial banks.

Consumer Watchdog is a nonpartisan consumer advocacy organization with offices in Washington, DC and Santa Monica, CA. Find us on the web at: http://www.ConsumerWatchdog.org

SOURCE Consumer Watchdog

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