US President Barack Obama signed the most sweeping financial reforms since the 1930s into law Wednesday, promising everyday Americans would no longer have to pay for Wall Street's mistakes. He signed into law the Dodd-Frank Wall Street Reform and Consumer Protection Act at the Ronald Reagan Building in Washington, D.C. In an ironic touch, Obama signed the bill in the building named after a president who championed deregulation. “These reforms represent the strongest consumer financial protections in history,” Obama said, before signing the new law, passed by Congress last week. “These protections will be enforced by a new consumer watchdog with just one job: looking out for people - not big banks, not lenders, not investment houses - in the financial system.” The new law reverses decades of deregulation, aiming to provide greater government protection for consumers and reduce risky practices at financial institutions to prevent a repeat of the financial crisis. Its controversial centerpiece is a new Consumer Financial Protection Bureau, which will have broad authority to write new rules for mortgages, credit cards, payday loans and other consumer products and make sure firms are adhering to them. The law also grants new powers to federal officials to oversee the economy for signs of trouble, break up large financial firms if they pose a danger to the economy and, for the first time, broadly regulate the shadowy and complex world of financial derivatives. If another financial crisis were to develop, the law gives regulators the power to seize and dismantle a firm on the brink of failure if its collapse would cause financial havoc. Obama and supporters said those powers would “put a stop to taxpayer bailouts once and for all.” Meanwhile, Federal Reserve Chairman Ben Bernanke told Congress on Wednesday that even though the economic recovery has weakened, the Fed plans no new steps for now to try to bolster it. Bernanke said the Fed would consider action if matters worsened. His comments to the Senate Banking Committee sent stocks tumbling. The Dow Jones Industrial Average shed 109.43 points (1.07 percent) to finish at 10,120.53. The tech-rich Nasdaq composite index slid 35.16 points (1.58 percent) to 2,187.33 and the broader S&P 500 index dropped 13.89 points (1.28 percent) to 1,069.59.
