In response to 2008’s failure on Wall Street, President Obama recently signed a bill that will result in the largest overhaul of financial reform since the Great Depression. Entitled, the Dodd-Frank Wall Street Reform and Consumer Protection Act, this legislation will set new restrictions on banks, stopping them from making risky investments with consumer dollars, and in turn becoming “too big to fail.”
This legislation comes at a time when consumers are skeptical of Wall Street and government in general. By passing the bill, the U.S. government is making a statement that they will no longer allow the banking industry to make faulty investments with consumers’ hard earned money and hopefully restoring trust. But what does this legislation really mean for small businesses?
With significant changes and restrictions on the credit card industry, some believe that this bill may hurt small businesses. Since most financial institutions’ capital will drop with new investment restrictions, many will have much less money to lend, making it harder for entrepreneurs and small business to get the funding they need to succeed.
While it is no secret that this new legislation will result in fewer business loans, at least we can count on the loans being given to sensible, responsible business owners that will no doubt equate in successful ventures. After all, that is the responsibility of a bank. At any rate, it is important for all business owners, big and small, to understand what this new reform entails, and what it means for your business.
We found a great article which outlines the new reform well. Click here to check it out. (http://bit.ly/dBebPj)