As of this writing, the sweeping Dodd-Frank Wall Street Reform and Consumer Protection Act is making its way to the desk of President Barack Obama, who is presumably eager to sign it into law. The enactment of the bill, named after its two chief democratic architects, Sen. Christopher Dodd (D-CT) and Rep. Barney Frank (D-MA), caps off a months-long struggle to fulfill one of the President's chief campaign goals and reform the nation's financial system in the hopes of preventing another economic crisis.

"Wall Street rigged the game. Big bankers gambled away our money. When they lost their risky bets, they came crying to the taxpayers for help," said Senate Majority Leader Harry Reid after final Senate approval of the bill.
"And two years later, that's still how the system works today. Without this reform, we would be inviting it to happen all over again. That's not a gamble I was willing to take, and neither was a supermajority of Senators."


Whether or not the bill and all of its more than 2,300 will succeed in its quest to prevent the next bubble burst will only be seen years down the road. In the meantime, several changes will go into effect that could wind up having an impact on commercial creditors and their companies. Here are a few highlights:


-Sarbanes-Oxley Exemption: Companies with a market cap under $75 million will be exempt from the Sarbanes-Oxley Act's Section 404(b), which would require third party audits of a company's internal controls. The provision was opposed by some officials and the Center for Audit Quality (CAQ), but survived the negotiations intact.


-Interchange Fees: The bill charges the Federal Reserve Board with, among many other things, issuing new rules on interchange fees, including the possibility of caps on said fees. Additionally, merchants will now legally be able to offer discounts to customers using cards that are cheaper for them to accept and be able to set minimums for card transactions.


-Credit Ratings Agencies (CRAs): Red-headed stepchildren of the financial crisis though they remain, the big CRAs got off pretty easy from the bill. Rather than facing any real impending regulations, the industry instead faces a two-year long study of its conduct by the Securities & Exchange Commission (SEC), and a specific office within the SEC that the bill also creates. After that period, and if no one has any better ideas, the SEC would have to devise and implement a plan to create a panel that assigns certain CRAs to certain issuers of asset-backed securities, thereby reducing the risk for conflicts of interest. The industry would also be far more vulnerable to legal liability should they give high ratings to risky investments.


-Consumer Protection: One of the bill's most controversial provisions creates a new consumer bureau to regulate mortgages, credit cards and other financial products. Working as part of the Federal Reserve, the Consumer Financial Protection Bureau would have the authority to write broad rules for various products offered by lenders. Critics of the new regulatory agency, of which there were several, argued that its new regulations could potentially even further reduce the availability of credit to consumers. Auto dealers and pawnbrokers are exempt from the bureau's regulation.


-Resolution Authority: The government, and specifically the Federal Deposit Insurance Corporation (FDIC), would have the authority to wind down failing firms using money fronted by the U.S. Treasury. Any taxpayer money used, however, would be paid back through an agreed-on repayment plan. Additionally, the bill creates a new council that will monitor systemic risks throughout the financial system and make recommendations to regulators about how that risk can be alleviated.


More than anything, the bill seems to heap a great deal of responsibility onto the nation's financial regulators. Most will have to conduct new research or design new rules for a wide array of different problems. And while the passage of the bill itself is big news, the real story may be the rules that will be seen, and felt, in the years to come from regulators empowered with new authorities.


Jacob Barron, NACM staff writer


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