The legislative program established during the Great Depression that helped shape consumer lending policies and convinced commercial banks that consumer credit could be a profitable industry was the National Industrial Recovery Act (NIRA). The NIRA aimed to help consumers by providing greater protection in lending and standardizing credit practices, making consumer credit more reliable. This encouraged commercial banks to view consumer credit as a viable and profitable business, laying the foundation for the growth of consumer credit in the financial industry
. The program was intended to help consumers by offering more protection in lending, which would make credit more accessible and trustworthy for individuals. This facilitated consumer borrowing and spending during the difficult economic times of the Great Depression, helping to stabilize and stimulate the economy
. Additionally, the Home Owners Loan Corporation (HOLC) , another New Deal program, also played a significant role by refinancing mortgages for struggling homeowners, preventing foreclosures, and making homeownership more accessible, thus aiding consumers directly
. In summary:
- NIRA shaped consumer lending policies by standardizing credit and protecting consumers, convincing banks of consumer credit's profitability.
- It helped consumers by making credit more reliable and accessible.
- The HOLC helped consumers by refinancing mortgages to prevent foreclosures during the Depression
