7 Hidden Gems of Financial Reform

The new financial reform law, known as the Dodd-Frank Wall Street Reform and Consumer Protection Act and recently signed into law by President Barack Obama, isn't exactly a page-turner. But hidden within its thousands of clauses are seven measures that could benefit consumers long after debate over the bill is a distant memory.

From financial literacy initiatives to help for distressed homeowners, these hidden gems address a broad range of consumer issues. While they probably won't have the impact of the more-trumpeted aspects of the law like the Consumer Financial Protection Bureau, they may just help a few consumers stay afloat during the next big economic downturn.

Many Americans take pride in the amount of economic freedom and autonomy the free-market system gives its citizens. The flip side of that is that Americans are free to screw up their finances badly, and often do just that.

The financial reform law creates a new Office of Financial Education to "improve the financial literacy of consumers" through financial counseling and education programs. The office will publish information for consumers on a broad range of topics, from handling savings accounts and other mainstream financial transactions to financial aid applications for students.

During the mortgage meltdown of the past few years, many homeowners were caught by surprise when the low initial rate of their adjustable-rate mortgages expired and their mortgage loans reset to a sharply higher mortgage rate with a correspondingly high monthly payment. Such mortgage-rate resets often happened without warning, putting substantial pressure on homeowners already squeezed by the worsening economy.

The new financial reform law aims to prevent unpleasant interest rate surprises by informing homeowners at least six months ahead of time of an introductory mortgage-rate reset. Along with the notice, lenders will have to include an explanation of how the new mortgage rate will be set, a good faith estimate of the monthly payment, a list of alternative financial options and contact information for credit counseling agencies.

Ever been burned by a lender but didn't know who to call? Well, the financial reform act establishes a single, toll-free telephone number to dial in case you encounter unfair or deceptive lending practices. Complaints will be routed to the appropriate federal or state agency and must be responded to in a "timely" fashion, according to the law.

For those who are more Web-oriented, the law also calls for the establishment of an Internet portal for submitting complaints.

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