The Senate has passed the financial reform act, and the president will sign it into law within hours or days.
Over the next few days, Bankrate will have extensive coverage of the law -- who the winners and losers are, hidden gems within the law and what it means to you. Soon we will run a Hummer-size opus I wrote about how the law will affect the way consumers get mortgages.
And you will read it and you will enjoy every word and punctuation mark.
Here's the irony that I enjoy most about the financial reform law: Congress is forcing banks to be more financially responsible. Few are the days when Congress has the moral high ground when it comes to financial responsibility. But I think Congress had the moral high ground here.
When it comes to mortgages, the law's main goal is to make sure that banks give loans only to people who can afford to repay them. During the boom, mortgage originators didn't care if you could afford your loan payments. Now they do, and the law tries to keep permanent that state of affairs.
The law also creates a category of plain-vanilla "qualified mortgages" that can more easily be bought and sold on the secondary market. Eventually, when the regulatory apparatus is set up (years, not months), these plain-vanilla home loans will dominate the market. They'll be commodities, like gasoline.
Because qualified mortgages won't be especially profitable, the biggest banks will dominate the industry even more so than today, because they'll make money in volume. And the big banks will use mortgages to shoehorn you into other banking relationships -- checking accounts, credit cards, retirement planning. Banks already do this. They'll do it even more.
The odds are better than even that your next mortgage will be from either Wells Fargo or Bank of America. They dominate the market and this law is likely to let them dominate the market even more. I don't think that's healthy. Members of Congress probably have little notion about this law's unintended consequences, including the further concentration of the mortgage industry into fewer lenders.