On July 16, the United States Senate passed the financial reform that makes some big changes in how banks and financial firms do business.

On the heels of the Credit Card Act, it’s another shake-up for the groups that are tied closely to the economy, especially after the financial bankruptcy filings of recent years shook so many.

The Minneapolis Star Tribune reported President Obama as saying “Because of this reform, the American people will never again be asked to foot the bill for Wall Street’s mistakes.”

However, what does it mean for average consumers?

• How it will be enforced: The bill creates a new agency in the form of the Consumer Financial Protection Bureau, which will be part of the Federal Reserve agency. This group will have unprecedented power to limit the harmful practices of lenders.
• Credit card users. According to the Dallas News, credit card and loan agreements will be in simpler language, which means no more staring at tiny print on that flimsy, see-through paper. It should be easier to understand the terms of any credit agreement. Also, the new Bureau will keep credit card companies from imposing unfair fees and prices on their customers. The bill is intended to reinforce the credit card reforms passed earlier this year.
• Use cash. The new bill could allow stores to offer discounts for customers who are willing to use cash for their purchases, because they don’t have to deal with credit card fees. Also, this legislation could give stores the green light to deny credit card use for transactions under ten dollars. So you may want to carry cash whether you’re interested in the possible discounts or not, reports NBC.
• Buying a home. The bill will restrict predatory lending. Banks will also be required to check the borrower’s income and assets, and should a borrower be rejected, they will be able to see the credit score that got them rejected. It is unclear, however, just how aggressive the home-buying restrictions will be. For instance, will it stop the enticing variable-rate mortgages that drew buyers into homes that they couldn’t afford at a low mortgage rate, only to be unable to afford the later higher mortgage rates?
• What the bill does not address. The bill does not address the automotive industry, which makes more money off of loans than off of actual car sales. The bill also does not address mortgage financing giants Freddie Mac and Fannie Mae, however. President Obama and congressional Democrats decided to deal with them in later, more specific, legislation. The Corporate Social Responsibility Newswire reports that the bill does not create new rules for predatory services such as payday lenders and debt collection companies.

President Obama is expected to sign the bill into law this week.