02.03 : GOVERNMENT REGULATION

Consumer Protection

Although there are laws and institutions designed to protect consumers, the problem of fraud still exists. Careful research can often help you avoid problems because you'll know what to look for and expect in a product or service. However, people who use fraudulent business practices may have a lot of experience doing so and could be hard to detect. If you know or suspect you are a victim of fraud, there are government resources to help you. States often have their own departments dedicated to consumer protection. On the federal level, the Bureau of Consumer Protection handles complaints. The Federal Trade Commission (FTC) oversees this office. The Bureau of Consumer Protection makes and enforces regulations for product advertising and labeling. This helps to ensure that consumers receive accurate information. The bureau also works to educate consumers and businesses about their rights and responsibilities. If companies make fraudulent claims about their products, the FTC can sue them to gain refunds for affected consumers. Note that the FTC is not responsible for resolving every complaint it receives. Yet it does use reported incidents to help detect patterns of fraud. Representatives can review your complaint and tell you the steps to take to resolve the issue.

Keeping It Safe

Economic hard times, both long gone and more recent, have driven Americans to demand supervision and regulation of the banking industry. The U.S. government has several agencies whose goal is to protect the money you save and invest in financial institutions.

Government Regulation

In 1929, the United States experienced a period of economic hardship that became known as the Great Depression. This economic downturn had staggering effects on financial institutions, businesses, and people across the country. Millions were hungry, poor, and out of work. People lost their savings when the stock market crashed in 1929. In addition, many customers worried as to whether their money was safe within banks and rushed to withdraw their money. Yet many banks didn't have the cash reserves on hand to meet withdraw requests and were forced to close. These events influenced a decline in confidence of consumers and prompted political policies focused on ending the Great Depression and the creation of programs to protect consumers. You will explore ways that government agencies supervise and regulate financial institutions, government policies that create incentives to save, and the ways the government protects consumers from fraud. Then, for your assessment, you will complete a multiple-choice quiz.

Fruad

deceptive and often illegal sales practices

regulations

government laws that control businesses

The Securities and Exchange Commission (SEC)

is a U.S. government agency tasked with protecting investors. The SEC requires publicly traded companies, those with stock available for sale, to disclose information on their financial health so that investors can make better decisions. The SEC also regulates the business practices of stockbrokers and other financial service providers to protect investors against fraud.

The Office of the Comptroller of the Currency, or the OCC

is a part of the U.S. Treasury. Its job is to make sure all U.S. financial institutions follow banking laws and regulations. This includes laws aimed at ensuring fair access to services and treatment of customers.

The Federal Reserve System, or the Fed

is the central banking system for the United States. It regulates the proportion of bank deposits that may be invested and the interest rates for loans. The Fed also regulates the buying and selling of government bonds. These regulations help prevent wild swings in the financial market that can wipe out a person's life savings.

FDIC and NCUA

o entice people to save money, the U.S. government has established protections for monies placed into banks and credit unions. The Federal Deposit Insurance Corporation (FDIC) and the National Credit Union Administration (NCUA) protect deposits up to $250,000 per institution. In the event of a bank or credit union failure, the government would reimburse account holders for their lost deposits..