The law will also establish the Office of Financial Literacy to teach the fundamentals of personal finance to youth and adults.
Many Americans have taken a financial hit because of the downturn in the stock market. Event the president didn't emerge unscathed: his daughter's college fund lost value.
While his retirement fund didn't take a hit -- mainly because most of the family's money ended up going into Treasury bills rather than stocks and equities, in order to avoid any possible conflicts -- the president said the family was lucky "by happenstance."
But his late grandmother worked in a bank and she was constantly monitoring her finances, and he saw the effect it had on her. Obama said he and his wife, Michelle, grew up in "very modest settings" and had a great deal of student debt when they graduated.
"One of the reasons that issues like consumer financial protection are so important to Michelle and myself is we're just not that far removed from what most Americans are going through," he said, adding that it was only a few years ago he that he and the first lady had high credit card balances, were trying to save for their young daughter's college educations and thinking about their own retirements.
"We know exactly how -- folks who are working very hard and are relatively lucky in good jobs can feel the financial stress these days," he said.
At its core, the new law will offer the broadest protections to the American consumer. Businesses have registered strong opposition to the broad reforms, and have accused the president of micromanaging industry.
He says he understands their concern.
"There's no doubt that it's possible to create regulatory structures that are too burdensome, that could suppress creativity and innovation in the free market," he said. "I think that, just to take the financial regulatory bill, here's an example of where we struck the right balance."
The law emphasizes transparency, and the administration sought input from industry to ensure that the regulations be effective without being onerous.
"We've got to have good regulators, people who are serious about their job, who understand that they are looking out for the public interest, that aren't subject to industry capture," he said.
Pointing out that reckless behavior on Wall Street has led to the loss of eight million jobs, the decline of home values and trillions of dollars in lost wealth, Obama said he didn't think any American believed it didn't make sense to monitor the financial industry more carefully.
"That's what most Americans would expect, because, sadly, they're the ones who have ended up bearing so much of the costs of decisions that were made by people who weren't really paying attention, and frankly, a government that wasn't paying enough close attention," he said.
Even though Obama's administration has passed historic health care and financial reform laws, his poll numbers have fallen at a new low.
Asked how he viewed the polling, Obama said his administration inherited the biggest financial crisis since the Great Depression and that even though the economy was growing again, it would take time to recover.
People were understandably frustrated, he said.