A Consumer Watchdog for Your Wallet

CNNMoney.com
April 6, 2010
Liberto, Jennifer

Embedded in legislation to prevent another crisis in the financial industry are some regulations that would directly impact the personal finances of many consumers -- including bans on penalty fees for paying off mortgages early, more options for taking credit card disputes to court, and a financial literacy program specifically designed for senior citizens and military personnel. The Senate and the House have different proposals, both of which give the consumer regulator discretion over matters, but they are prescriptive on one thing: the new oversight body must prohibit penalty fees for subprime mortgages and cap and phase out fees for traditional mortgages. Center for Responsible Lending spokeswoman Kathleen Day praised this effort for getting rid of a "key ingredient to the subprime mortgage crisis" and for going beyond the Federal Reserve's 2008 efforts. On the issue of arbitration contracts, the House says the consumer regulator should ban forced arbitration, whereas the Senate believes the consumer regulator needs to study the issue further before reaching a decision. As far as consumer financial education is concerned, the House proposes an Office for Financial Protection for Older Americans, while the Senate proposes an Office of Financial Literacy. Regardless of name, both offices would set standards for financial advice programs in an effort to prevent consumers from falling prey to scams and also would streamline existing programs.
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