Three Republican Senators joined 57 Democrats Thursday to get the necessary votes to pass the financial reform bill, soon to be known as the Dodd-Frank Act (in honor of its two originating supporters). It is now headed to President Obama for his signature.

The law is primarily focused on avoiding future systemic banking system failure, the kind of which has pushed us into the largest recession since the Great Depression. Here’s a quick overview of some of the measures put in place to help achieve that goal.

* Volcker Rule will force big banks to sell hedge funds

*New transparency, reporting and capital rules for derivatives

* Liquidation mechanism for big failing banks to minimize market impact

* Combine two bank regulators at the center of the crisis

* Create a council of regulators to watch for systemic risk

* Give shareholders more power in corporate governance and CEO pay

* Audit of the Fed’s emergency and other lending facilities

Those may sound all fine and dandy, but probably come across as being relatively meaningless to the average consumer. That’s where the new Consumer Financial Protection Bureau, housed in the Federal Reserve, comes in. It is solely devoted to combating consumer abuses in the marketplace.

Here are four of the big changes that you can expect — and their consequences, both intended and unintended.
Credit Scores

The upside: Long before this regulation was passed, you could get three free credit reports from annualcreditreport.com, under federal law. That was not the case with credit scores. You almost always have had to pay for those or sign up for something (credit monitoring) that you probably shouldn’t.

Now, however, if a lender turns down your application for credit because of your credit score, the lender is required to tell you what your credit score is, for free.

The downside: Credit scores, like credit reports, should be free to consumers at least a few times per year. Oh well, maybe next time.
Mortgage Risk

The upside: A former employee of the defunct mortgage company Countrywide Financial, which was gulped up by Bank of America (BAC), once told me “Yeah, we approved everything, often times without even looking at credit history or income. We were making good money, so why not?”

Under the new rules, lenders must verify a borrower’s credit history, income, and employment status, so that we don’t get into the foreclosure mess that companies like Countrywide put us in.

Banks will also be required to hold on to at least 5% of the loans they make instead of selling them to investors. More risk should equate to more precaution if you can’t unload the cancerous loans.

The downside: With tighter requirements, banks are scaling back their risks, which might make it harder for you to get a mortgage. My opinion? If it’s hard for you to get a mortgage, you probably shouldn’t be buying a house.
Credit and debit cards

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