New Regulation Rules: Their Impact on You

President Obama's sweeping pROPOSAL to overhaul the financial regulatory landscape is perhaps the most comprehensive and ambitious plan in 76 years -- ever since FDR's New Deal ushered in the Securities and Exchange Commission, among other institutions and rules.

Indeed, if the points and proposals outlined in the president's 88-page draft reform package come to pass, this reshaping of government oversight of the financial system could -- for good or for ill -- become the biggest legacy of the economic crisis, and Obama's presidency.

Whether that legacy is viewed favorably or not, only time will tell. After all, government regulations can have unintended consequences. Whether these changes will make the system more fair and transparent is anyone's guess. You don't have to be a Libertarian to know that government action can just as easily distort markets as make them more efficient.

Some observers remain keenly skeptical of the administration's efforts. Influential bank analyst Richard Bove of Rochedale Securities believes the Obama rules will only add costs to the system and will not lead to more effective oversight. After all, a regulatory framework is already in place, Bove says, but the political will to enforce it has been absent -- and that's just the way Washington wants it. Indeed, the only truly aggressive SEC director since the Kennedy administration was Harvey Pitt, Bove says. "[And] when he got religion about regulation, he got removed."

Dr. Walter Gerasimowicz of New York-based Meditron Asset Management is dubious about a number of proposals, especially that of expanding the Fed's role. “What I find to be very disconcerting is the fact that our Federal Reserve is going to have extensive power over much of the industry," Gerasimowicz says."Why would we give the Fed such powers, especially when they’ve failed over the past 10 years to monitor, to warn, or to bring these types of speculative bubbles under control?”

From eliminating the Office of Thrift Supervision to regulating hedge funds, the new rules would give the government greater power over Wall Street. And as for Main Street, the administration proposes creating a new agency to protect consumers when it comes to mortgages, credit cards and other consumer financial products.

If all this comes to fruition, there'll be a new sheriff (or sheriffs) in town. Here's a look at what some of the proposed changes could mean for consumers and investors. (But don’t expect change any time soon. Congress will wrestle with health-care reform first and then move onto these new initiatives in the fall.)