consumer regulation dates back to few centuri...
The History of Consumer Regulation in the USA
consumer regulation dates back to few centuries. The history shows struggle for
America to free themselves into a social and free regulation of their own
markets and industries. One of the commissions formed in 1887, The Interstate
Commercial Commission had the base role of setting rates, imposing taxes and
set operational for railroads.at this era railroads were viewed as a natural
monopoly and market. The ICC rates provided predictable, adjustable profits to
industry struggled to oppose the regulations and was backed up by the US
Attorney General then who created a work friendly relationship between the
industry and the commission instead of fights (Steiner, 2006). This bore out in 1930s where
railroads got regulation of their own that were not rationalized based on
market failure or natural monopoly. This could later see interstate highway
taxes go down.
1913, the Federal Reserve System was formed to regulate the federal banks.
Though previously around mid-18th century, (1963) there existed a
currency regulating body for national chartered banks. The strength of banks
was in the state banks then.
Federal Reserve Act in 1913 brought stabilization to the banking systems in the
USA. This saw creation of a central bank that directed the flow of credit and
money that would easily enhance the USA economy (Stole, 2006 ). This commission had the authority
over all financial systems and values of money in the USA thereof. In 1980s, few governors held meetings to
decide on fluctuation of interest rates by banks – this was to be done by
changing the rates paid to banks by short-term deposit. This is where the
deflation and inflation came about.
several regulatory bodies’ formation broke up. In 1914, The Federal Trade
Commission was formed with an aim to control market. In the year 1927, FCC came
up from the former Federal Radio Commission (FRC). Three years later (1930) The
Federal Energy Regulatory Commission was also initiated. The Energy Act
regulated the rates for gas, oil, and electricity (Stole, 2006). This provided easy transactions for
the citizens who use the commodities because they knew the taxes and the
year 1932 saw formation of the Federal Home Loan Bank Board. This aimed at
helping financial parties, societies, or associations in making building and
mortgage loaning. The FHLBB though did not make the best out of its duties and
only few billions were gained out of businesses. They later renamed it to
Office of Thrift Supervision (OTS) in 1980s. In 1999, the saving bank charter
was eliminated and OTS went with it (Steiner, 2006).
banks that were not members of the Federal Reserve System were regulated by the
Federal Deposit Insurance Corporation that was formed from the Banking Act of
1933. The government too has to insure banking and the taxpayers who take
loans, mortgages and deposit to the banks.
year 1934 saw legislation boom of major acts, The Security and Exchange Act and
the Communications Act. The Communications Act led to establishment of FCC that
had the powers to license, examine, regulate and direct all communications from
telephone, radio and other forms of communication (Stole, 2006).
National Labour Relations Board was formed in the year 1935. This was drafted
from Wagner Act of 1935. The aim of the board was to ensure that oaths not to
be in communist parties by union officers were taken as a certification
requirement (Hyman, 2011).
and consumer groups needed a right of fairness. The establishment of The
Administrative Procedure Act in 1946 could make it a reality for the citizens
and consumers to quench their thirst for fairness. Majorly, the act was formed
to give allowance of time to judge, scrutinize the proposed regulation before
they were passed. This would allow for appealing changes, and amendments.
in 1966, the APA Act undertook amendments and included The Freedom of
Information Act. This Act gave the citizens and corporations a chance to fully
scrutinize, investigate and inspect any document belonging to the government. Though
this was legalized there were exceptions provided to avoid extremities and
intrusions in the government secrecy (Hyman, 2011).
environment plays a key role for the consumers. It sets the base for production
and consumption of any product or service. In 1970s, environment protection
agency was established to secure and keep the environment safe. It got the name
Environment Protection Agency (EPA). In 1972, Consumer Product Safety Act was
established. This was not enough as far as product safety and features were concerned.
The Commodity Futures Trade Commission followed up in 1974. In 1975, concern
for nuclear capacity was initiated and The Nuclear Regulatory Commission was
established. The same year saw the formation of International Trade commission.
This extended favours and advantages to both the local and international
Federal Elections Commission was also formed. The commission highlighted rules
and regulations for all election practices, whether minor or major. This
eliminated election malpractices in the USA. It ensured smooth campaigns,
equity and election of competent leaders to boards, panels, committees,
executives, associations and government.
Home Mortgage Disclosure Act of 1975 needed banks to show where they made their
mortgage loans. This was due to long grievances by citizens of banks’
tendencies of not lending to the poor or minority. This later saw passage of
the 1977 Community Reinvestment Act (CRA) that ensured equity in lending to all
communities including law, average and high states. Branches were set to be
opened all over for banking firms. Quality rates and fair taxation was also
generated to eliminate discrimination and overpricing.
Federal Trade Commission is the sole dictator of markets in the USA. It works
along with other bodies though. The main role is to afford the people of USA
competent products and services. The agency prescribes a number of subjective
rules and laws that ought to be observed in the markets. The FTC comprises of
five president appointed members confirmed by the senate too. This body too
enforces the civil law and the anti-corruption department thus increases the
FTC act bars deception in the markets. These deceptions vary from omissions,
exaggerations and lies. These variations make the clients act under the
circumstances of influence because they need a commodity or service. The
commission has other acts that its jointly works with to realize its goal, they
include; Truth in Lending Act, Fair Credit Billing Act, Fair Credit Reporting
Act, and the Equal Credit Opportunity Act, as well as continuing enforcement of
industry specific acts, such as the Petroleum Marketing Practices Act, and the
Smokeless Tobacco Health Education Act of 1986, and additional laws relating to
consumer privacy such as the Do-Not- Call Registry Act of 2003, and the
Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003.
set FTC authorities give directions that govern firms in regard to production,
processing and selling o products. Unsecured and unregistered products are
banned and heavy fines imposed on the perpetrators. The registry directive from
FTC demands that every product be registered and checked for standards and
tested before put into the markets.
gives products a unique code as either a serial or identity code (Hyman, 2011).
This code is significant in identifying the features of the commodities and
making the correct judgement before using them by a customer.
too have to be registered, hold annual general meetings, must have a governing
body and file returns on sales and advances in their business. Any changes in
pricing, quality and process of manufacture have to be reported before the
product comes out to the market.
of National Traffic and Motor Vehicle Safety Act in 1966 by the US congress
gave thumbs up for the automotive industry. It was signed into law by President
Johnson. The automobile industry was then better, unified to standards of
quality and safety. Cars were then made better with head rests, energy
absorbing steering wheels and safety belts (Hyman, 2011). These and many more advances showed
enhancement in road safety and precautions. This showed relevant reduction in
and Drug Administration (FDA), formed in 1906 is an initiative to protect and
promote public health. This is achieved by regulating and inspecting food
safety, tobacco implements pharmaceutical medications and other drugs quality,
usage, prescription and manufacturing. This also controls and gives sincerity
in firms to the normal people who purchase the drugs and food.
history of consumer regulation is long and shows continuous and dramatic
changes, progression and adjustments as time goes by. This betters it and relevantly
updates it to fit the current situations and demands.