What legislative act was designed to protect consumers from financial abuses by the banking industry?

The Banking Act of 1933, often referred to as the Glass-Steagall Act, was specifically enacted in the aftermath of the Great Depression to address the widespread financial abuses witnessed during the 1920s and early 1930s. Its primary goal was to restore public confidence in the banking system, which had been severely eroded by bank failures and widespread financial instability.

One of the key features of this act was the establishment of the Federal Deposit Insurance Corporation (FDIC), which provided federal insurance for bank deposits. This measure helped protect consumers by ensuring that their deposits were safe even if a bank failed, thereby preventing bank runs and promoting financial stability.

Furthermore, the act contained provisions that separated commercial banking from investment banking, reducing conflicts of interest and limiting risky financial activities that could endanger consumer deposits. By implementing these safeguards, the Banking Act of 1933 was critical in offering protections that helped consumers feel secure when placing their money with financial institutions.