How provisions of financial reform will affect Iowa
July 19, 2010 by Karen Mracek
By KAREN MRACEK • kmracek@dmreg.com • July 16, 2010
The financial services industry employs about 81,000 employees in 6,100 businesses in Iowa.
Iowa Bankers Association President John Sorensen expressed disappointment about the new regulations.
“While some core provisions in the bill provide needed reform for Wall Street, we are very concerned about how the new rules and restrictions will impact traditional banks in Iowa that did not cause the financial crisis,” he said.
Iowa Attorney General Tom Miller said the measure’s Bureau of Consumer Financial Protection would be an asset.
Here are some provisions of the law that will affect Iowans and financial services industries here:
ANNUITIES: The law will exclude indexed annuities from the oversight of the Securities and Exchange Commission. These insurance products offer a minimum guaranteed return and interest based on the performance of a market index. Insurers with operations in Iowa brought in more than one-third of all indexed annuity sales in the first quarter of 2010.
MORTGAGES: Wells Fargo Home Mortgage, based in West Des Moines, is the nation’s largest mortgage producer, originating $427.2 billion in home loans last year. The law will bring additional regulation of mortgages through the consumer protection bureau, and banks will be required to keep additional reserves for loans they make.
FINANCIAL ADVICE: Most consumers are confused by the differences between brokers and investment advisers. The law will require the Securities and Exchange Commission to study the issue in next six months and will give the SEC authority to require financial advisers to have the same level of responsibility to their clients.
CONSUMER PROTECTION: This bureau will create another level of compliance for financial services companies. All of Iowa’s 378 banks – because they have less than $10 billion in assets – will be asked to follow the bureau’s rules, but enforcement will remain with their current regulators.
DEBIT CARD FEES: The law will allow retailers to set a $10 minimum purchase requirement, but no higher. It also will give the Federal Reserve power to limit the fees that card issuers can collect on debit-card transactions.
