U.S. Lawmakers Reach Accord on New Consumer Protection Law

The Wall Street Reform and Consumer Protection Act is expected to have enough support to become law. Both the House and Senate will vote next week. If the bill passes, President Barack Obama is expected to sign the package into law by July 4.

Bureau of Consumer Financial Protection    The new law will create a bureau within the Federal Reserve to regulate consumer financial products like mortgages and credit cards.

Payday lenders and check cashing businesses will also be regulated, but enforcement would be left to states or the Federal Trade Commission.

Auto dealers and pawnbrokers are exempt from the oversight of the new Bureau of Consumer Financial Protection regulation. The Defense Department had lobbied for consumer protection on auto loans because they claim that soldiers have often been the target of abusive auto loan practices.

The new rules will prohibit mortgage brokers from steering customers into more expensive loans for a commission and will ban no-documentation or "liar" loans. It will also make credit card statements more readable and transparent, allowing consumers to more easily compare products.