The financial reform bill’s basically a done deal. So how will it change your day-to-day job?
First the good news: Unless you work in the financial services industry, your job isn’t about to be turned on its head. In fact, many of those folks may not feel too much either, since many of the bill’s “get-tough” provisions were made a little less tough to get the votes needed to get it through.
And everybody’s got a little time on most fronts: New agencies will be formed and more regs are needed to implement many of the changes aimed at overhauling the financial system.
But there are a few changes finance departments will feel a lot sooner, no matter what industry you’re in. And they’re in these three areas:
- Credit card payments
- Bank fees, and
- Credit policies.
Change #1: Credit card payments
One major target of the reform efforts could result in a cash flow win for your company: credit cards.
First, if you’ve been getting hit by those 1-2% “swipe fees” from big banks when customers pay with a debit card, you should start saving soon. The Fed has the right to limit those fees the card issuers charge, starting the day after the bill is signed into law.
The Fed has also been charged with issuing rules to ensure that interchange fees are in proportion with the cost of processing those transactions.
With that major downside eliminated, your company should be free to take more credit cards, which can lead to an instant cash flow boost.
Change #2: Bank fees
But banks are going to have to make up that money somewhere! And one of the biggest changes expected to come out of the financial reform bill is increased bank fees. So if your company currently enjoys free checking, those days are most likely numbered. Many small businesses have received this freebie for years.
It’s smart to budget more for treasury in 2011 – banks are expected to start yanking this convenience and adding other fees in the next six to 12 months.
Change #3: Credit policies
One specific finance department in business-to-consumer firms will have to “reform” its procedures thanks to the new law: Credit.
Going forward, if your company denies credit to a potential customer based on what it hears from a ratings agency, you will have to disclose the reason – and even the score.
That may inject a little time (and possibly a lot of aggravation) into your process.
Other changes are bound to unfold – stay tuned.
Info: Here is the The Wall Street Reform and Consumer Protection Act (H.R. 4173).
