Financial Reform Law: What's In, and What's Out

President Obama signed the sweeping new financial reform lawafter two years of heated debate. It's designed to prevent another economic meltdown - one the White House hopes is too big to fail.

CBS News investigative correspondent Sharyl Attkisson reports the new law is nearly 880 pages -- packed with regulations and restrictions that touch most every facet of the economy.

So how exactly does Congress' creation solve the complex problems behind the financial storm?

Remember, big banks took big risks, straying from the primary role of lending money. They dove into risky trading, relying on mortgages that became worthless. Lending froze and taxpayers got stuck funding a $700 billion dollar bailout.

Now, bank investments will be more regulated. Banks will be barred from so-called "speculative trades".

Then there are the non-banks: financial firms that the government also deemed too big to fail. Taxpayers had to bail out AIG and others after they too, got stuck with toxic assets.

Now, new procedures can safely shut them down rather than bail them out.

"There will be no more taxpayer-funded bailouts. Period." President Obama said today.

But that's a major point of disagreement: Republicans argue the new law doesn't stop bailouts: it makes them permanent.

"For ordinary Americans who just wanted to see an end to the bailouts, this bill is no victory," said Senate Minority Leader Mitch McConnell, R-Ky.

That's because the government can still bail out firms of its choice -- lending them money, buying their assets, paying off creditors. That, says Republicans, exposes taxpayers to potential trillions of dollars. Their attempt to send failed firms through the normal bankruptcy route - was struck from the bill.

At the heart of the housing crisis were millions of people given loans they simply couldn't afford. Now, lenders have to verify that borrowers can make the payments. And lenders can be penalized for "irresponsible lending."

One big piece of the puzzle that's left out of this big reform: Fannie Mae and Freddie Mac. They're the government-backed private companies that made billions -- and whose executives made millions -- while buying risky mortgages.

Taxpayers have kicked in $145 billion dollars and counting. Republicans wanted them to wind down like other big financial firms in trouble but that was removed from the bill.

Experts are mixed on how well the new law will work.

According to an AP poll, 64 percent of Americans aren't confident the new law will stop a future meltdown.
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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.

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