Obama signs financial reform law

U.S. President Barack Obama Wednesday signed into law sweeping new financial reforms meant to increase regulation of banking and investment, saying "there will be no more taxpayer-funded bailouts."

Obama said the new rules make clear no firm will be protected because it is too big to fail, like insurance giant AIG.

In remarks before the signing, Obama said the law represents a triumph for consumers.

He called the reforms "the strongest consumer protections in history."

Obama added, to a burst of applause: "Because of this law, the American people will never again be asked to foot the bill for Wall Street's mistakes."

The bill aims to increase protection for consumers of financial products — from mortgages to investment securities — and prevent future taxpayer bailouts of Wall Street banks.

It assembles a powerful council of regulators to be on the lookout for risks across the finance system.

It places shadow financial markets that previously escaped the oversight of regulators under new scrutiny and gives the government new powers to break up companies that threaten the economy.

Large, failing financial institutions would be liquidated and the costs assessed on their surviving peers. Borrowers will be protected from hidden fees and abusive terms, but also will have to provide evidence that they can repay their loans.

Federal Reserve gets new powers

The Federal Reserve will get new powers while at the same time coming under expanded congressional oversight.

In an ironic touch, Obama signed the bill in the massive Ronald Reagan Building, named after a president who championed deregulation.

"Today's signing of comprehensive financial reform into law is a major victory and joins a growing list of progress, dismantling the harmful legacy left by George W. Bush and the Republican Party," Richard Trumka, president of the American Federation of Labour said in a release.

"We will continue to fight to get and keep our country on track towards an economy that works for everyone," Trumka said.

Large Wall Street banks have welcomed some provisions in the bill, but have fiercely opposed others that would limit their banking business and cut into their profitability.

Republicans have portrayed it as a burden on small banks and the businesses that rely on them and argue it will cost consumers and impede job growth.