Everyone agrees on two things about the new federal financial services reform legislation: Nobody is completely happy, and big changes — positive and negative — are coming.

For the first time — if, as expected, the legislation passes in the Senate — a federal agency will have sole responsibility for protecting consumers from a host of abusive financial practices.

Long-standing but controversial industry practices, along with some fees, will go away. Non-bank businesses that never faced federal scrutiny will now be supervised.

Consumer advocates have long desired such action, but many never expected to see it.

“This is really great legislation. There are pieces of it that I can’t believe that we got,” said Kirsten Keefe, senior staff attorney at the Empire Justice Center in Albany, a statewide advocacy group and member of the New Yorkers for Responsible Lending coalition. “I’m completely in awe that that happened.”

But the reforms may have unintended consequences for bank customers. Fees could go up in other areas as banks try to make up for lost revenues on debit cards and overdrafts. Free checking accounts may go by the wayside, because banks conclude they can’t justify the expenses.

People with less-than-stellar credit might not get loans, as banks play it safe. And cherished community banks may throw in the towel and sell out because they’re unable to afford to comply with the reams of new rules.

“An inordinate amount is spent on compliance in the banking industry,” Salvatore Marranca, CEO of Cattaraugus County Bank, said earlier. “We are choking on regulation.”

The state requires banks to offer a “basic banking” account with low fees, but it does not have to be free. No Western New York bank, aside from Bank of America Corp., has indicated plans to change products and prices, and even Bank of America still is developing its plans.

“The jury’s out on free checking. We’ll have to see how that plays out,” said John R. Koelmel, CEO of First Niagara Financial Group. “We’re trying not to get ahead of ourselves until we understand the real outcomes and how to best maneuver.”

The package of reforms, known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, would

mark the third major defeat for the banking industry in the last year, including reforms to credit card industry practices and new Federal Reserve regulations mandating that banks get consumers’ permission before covering debit card overdrafts and charging fees.

Pending in Senate

The legislation, in the works for more than a year, was approved Wednesday by the House and is expected to pass the Senate sometime after the holiday weekend. President Obama has said he will sign it, ushering in the biggest changes in financial services since the 1930s.

“For consumers who are drowning in debt and overwhelmed by high interest rates, penalties and fees, this bill is a lifeline,” said Pamela Banks, senior policy counsel for Consumers Union, the Yonkers-based nonprofit publisher of Consumer Reports. “Consumers finally have a consumer bureau that will be on their side.”

The new consumer financial protection bureau would have extensive power to make and enforce regulations, even over industries previously subject to little federal regulation.

It will have authority over traditional products such as mortgage, credit card, student and other consumer loans, as well as non-banks like checkcashers, pawn shops, payday lenders and rent-to-own stores. It also will oversee debt collectors, debt settlement firms, credit counselors and credit bureaus.

“It is a crackdown on the most problematic or blatant issues that we saw,” said David Berenbaum, chief program officer for the National Community Reinvestment Coalition.

The new bureau will evaluate and write rules governing all financial products and will ensure compliance at banks or credit unions with more than $10 billion in assets, such as HSBC Bank USA, M&T Bank Corp. and First Niagara Financial Group locally. It also will investigate complaints.

But to consumer advocates’ dismay, it will not oversee retailers, real estate brokers, manufactured and modular home dealers, tax preparers, attorneys or car dealers, who received a special “carve-out” after intense lobbying. Car dealers, instead, will be subjected to more scrutiny by the Federal Trade Commission.

Since the agency still has to be set up, staffed and educated on the issues, it might take as long as four years to implement any final rules.

“Yield-spread premiums,” or mortgage broker fees for higher-priced loans, are essentially banned so a broker won’t profit from a higher-rate loan.

The bill also requires that additional lending data be collected and reported by companies, to help monitor their performance. And it permanently raises the level of federal deposit insurance to $250,000 from $100,000.

Lawmakers also instructed the Federal Reserve to set reasonable rates for “interchange” fees merchants pay when customer use debit cards. That’s likely to put a big dent in bank revenues.

Protection has a cost

The new consumer protections may have a cost for consumers and businesses. Banks say they will lose a lot of revenue from the new restrictions and will have to find other ways to cover their costs and make a profit, including by creating or raising fees in other areas.

Between overdrafts and interchange, for example, First Niagara expects revenues to drop by $20 million to $25 million. “Investors are going to expect us as an industry to figure out how to recoup those dollars,” Koelmel said. “If you can’t earn it in one business or one product, you’ve got to get it elsewhere.”

And Evans Bancorp projects up to 30 percent of its interchange revenue and one-fourth of its overdraft fees will disappear. “Every single bank in Western New York will be impacted by the decrease in banking revenues,” said David Nasca, its CEO. “That will impact the profitability of all banks.”

Banks will get out of businesses or products that don’t make money. Free checking accounts already are considered at risk of vanishing. Wells Fargo & Co., the nation’s fourth-largest bank, did away with free checking last week, and Bank of America Corp. is now studying its products, with the expectation that customers will have to pay a monthly fee or maintain enough business with the bank for a waiver.

“It is going to raise the price to consumers because of regulatory compliance,” Nasca said.

The reform legislation also will restrict banks’ ability to invest and trade using their own money for their own profit. They also have to retain some stake in the loans they sell, ensuring they take more care in approving loans. And they will have to hold more capital.

“The banks aren’t going to want to do anything that could possibly bring a question. So they won’t,” said Jim Holding, spokesman for Northwest Bancshares.

That means credit may tighten up, just when it’s needed to kick start the economy.

“If you over-regulate and overburden us, you end up slowing down the process,” Mark Czarnecki, M&T president, previously said.

Finally, banks say, the costs of complying with the 2,323 pages of the new law, plus 400 subsequent regulations, will be immense. That’s especially true for small banks, who say they shouldn’t be swept up in the reforms because they had nothing to do with causing the crisis in the first place.

“The vast majority of the financial problems were caused by large banks and others such as mortgage brokers, and not at all by community banks,” said Peter Forrestel, president and CEO of the Bank of Akron.

They say the increased burden might compel small banks to bulk up in size or sell out.

“They’re going to force banks to either get capital or get bigger, and if they can’t do either, they’re not going to be around,” Nasca said.