Financial Regulatory Bill Passes Congress on July 15, 2010 a.k.a. FinReg

07.16.10, 14:09 PM EST

The highly anticipated - and oft altered - financial regulatory bill, commonly referred to as FinReg, finally passed Congress on July 15th, 2010. The bill, expected to be signed into law by President Obama next week, will enact sweeping changes upon the financial system that will be felt for years.

The impending law will delegate oversight responsibilities to 10 agencies that have been given broad powers to enforce wide-ranging rules designated to prevent a financial collapse and to protect businesses and consumers.

While FinReg is expected to raise costs primarily for financial firms, the merits of the bill had to be watered down substantially to get through the halls of Congress. The impact, while considerable, is not a game changer for large financial institutions that have been deemed "too big to fail."

Still, the bill is the most extensive and comprehensive overhaul of the financial system since the Great Depression. Major highlights of the bill include:

• Federal authority to take control of firms that are in danger of collapsing
• Establishment of a federal insurance office within the Treasury Department
• Regular meetings for the newly created Federal Stability Oversight Council
• New rules for nonbinding shareholder votes on executive compensation
• New rules for risk-retention requirements relating to securitized assets
• Federal Reserve gaining the ability to write rules on debit card fees
• Consumer protection bureau assumes control of consumer related problems
• Merger of the Office of Thrift Supervision and the Office of the Comptroller of the Currency
• Completion of new derivative rules
• Mandatory registration for hedge funds and investment advisors with the SEC
• Limiting bank investments in hedge funds and other vehicles
• Capping the size of large institutions to 10% of aggregated liabilities
• Contingent capital requirements for banks
• Streamlining mortgage-disclosure forms

The bill passed by a margin of 60-39 in the Senate. President Obama is expected to sign the bill into law next week.