It’s being hailed by its authors and proponents as the biggest overhaul of financial regulation laws since the Great Depression—Sen. Christopher Dodd, the main architect, called its passage a “great moment.” But there is much more mystery than certainty about how the new financial rules will impact the end user of financial services, from mutual funds to the average bank savings account. A new consumer protection agency is established; the “Volker Rule,” which bars banks from making risky trades with its own money (which of course is your money) was approved; the principal of “too big to fail” was knocked down in the bill. However, the initial, and potentially long-term, effects felt by the average consumer might hurt more than help: the end of free checking accounts at banks and higher interest rates on all kinds of loans are most likely on the way as banks look to new revenue sources. But is it worth it if new oversight will prevent future financial meltdowns, like the one we’ve been enduring for three years?
Joseph Mason, professor of banking at Louisiana State University & Fellow at the Wharton School
Sen. Jeff Merkley, D-Oregon; member of the Senate Banking, Housing & Urban Affairs committee & author of the “Volker Rule” amendment