Discuss the impact of the Dodd-Frank Act on credit and debit cards, consumer loans, credit scores, and residential mortgages

What will be an ideal response?

Credit and Debit Cards: The act includes a provision at reducing "interchange fees." These are fees that banks charge retailers when consumers pay with debit cards. Under the Dodd-Frank Act, the Federal Reserve Board (Fed) will determine what constitutes a "reasonable and proportional" fee for debit card transactions, which usually run about 1 percent of the transaction, and are passed on to the consumer. If they are lowered, prices to consumers may be lowered. Retailers are allowed to require a minimum purchase before they accept a debit or credit card. Banks have indicated that they may have to eliminate debit card reward programs and increase other fees to make up for lost revenue. Consumer Loans: The new Consumer Financial Protection Bureau will regulate mortgage, credit cards, some payday lenders and check cashing companies, and lenders that provide private student loans. Auto dealers' financing and insurance arms are exempt from the bureau's jurisdiction, after extensive lobbying. Credit Scores: Consumers who are turned down for a loan are entitled to receive a copy of the credit score the lender used to make the decision. Consumers are entitled to a free score if they were offered a loan at a rate higher than the one provided to borrowers with excellent credit. Consumers can obtain a free credit score if the score results in an "adverse action" such as loss of a job applied for or a higher insurance rate or other matters that depend on such scores. Residential Mortgages: Lenders are no longer allowed to pay mortgage brokers a commission based on the interest rate for a home loan. The Dodd-Frank Act would prevent borrowers from paying a portion of the closing cost up front and rolling the rest into the loan in the form of a higher interest rate. Prepayment penalties would be limited or prohibited depending on the type of loan, and lenders would be required to determine whether the borrower could afford the monthly mortgage/payments, combined with insurance and assessments.