Financial companies face new, strict rules

This article was originally published by Bankrate.com on Tuesday, July 7, 2009.

By Katherine Reynolds Lewis

Highlights
The proposal will likely change as it goes through Congress.
Officials hope the financial meltdown will spur passage of the proposal.
A new agency will be able to write rules that promote transparency.

President Barack Obama has proposed overhauling the U.S. regulatory structure to create a consumer-oriented regulator, consolidate existing agencies and set more strict rules for financial companies.

For individuals, the proposal offers greater consumer protection and relief from the hidden fees and confusing disclosure documents that have become commonplace in the market for mortgages, credit cards and other banking products.

Both houses of Congress must approve legislation for the plan to become law and the proposal will likely change along the way.

"There's going to be a big push to get it done before the end of the year," according to David Min, associate director for financial markets policy at the Center for American Progress, a Washington, D.C.-based progressive think tank. "A lot of it depends on how the banking sector does in the next six months."