Yesterday President Obama passed the greatest financial overhaul bill since the Great Depression, marking the outcome of a two-year legislative debate on how to avoid a repeat of the 2008 financial crisis. Associated Press quoted Obama, who said, "Because of this law, the American people will never be asked again to foot the bill for Wall Street's mistakes."

According to The Los Angeles Times, "the new law reverses decades of deregulation, aiming to provide greater government protection for consumers and reduce risky practices at financial institutions". AP pieced together a more detailed outline: the new law now requires "a council of regulators" headed by the Treasury secretary that watches over any financial threats, more limitations on banks' risky business, a new agency called the Bureau of Consumer Financial Protection that "oversees consumer products and services." These services include mortgages, parday lenders, credit card companies, and the biggest banks.

Nevertheless, the debate still continues with many lacking Obama's optimism in the bill. Some arguments against the bill include that it would favor bigger banks over smaller ones and the lack of restructuring against Fannie Mae and Freddie Mac. Others agree with former Treasury secretary Henry Paulson who said, "there are too many unknowns as to how the regulations will be applied."

In addition, according to the Wall Street Journal, a big controversy now lies in the Bureau of Consumer Financial Protection and who will be the first to head this agency that will get about a $500 million annual budget "that doesn't require approval from Congress."

Nevertheless, Former Fed Chairman Paul Volcker said, "I think this bill is a big step forward. It deals with the major issues, not every one of them. Some are going to have to be dealt with next year, like the mortgage market and Fannie Mae and Freddie Mac. But it dealt with some very clear issues that needed to be dealt with. A lot is going to depend on how it's administered over time, and I think the regulators should have had a big wake up call by what's happened in the last" few years."

*Any information on all blog entries should not be construed as legal advice. If you have any legal issues, please consult an attorney.