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 primarily the Banking Act of 1933, also known as the Glass-Steagall Act. This act was designed to provide safer and more effective use of bank assets, regulate interbank control, and prevent the diversion of funds into speculative operations. It aimed to restrict the use of bank credit for speculation and direct credit into productive uses such as industry, commerce, and agriculture. The act also created the Federal Deposit Insurance Corporation (FDIC), which insured bank deposits and helped restore public confidence in the banking system
. Additionally, the Emergency Banking Act of 1933 played a crucial role by stabilizing banks and restoring investor confidence. It temporarily closed banks for inspection and introduced key provisions that have endured, including the FDIC insurance. This act helped reassure Americans that the government was monitoring the financial system closely
. While the Emergency Banking Act and the Glass-Steagall Act were central, other New Deal programs like the Home Owners' Loan Corporation (HOLC) also influenced consumer credit by addressing mortgage crises and refinancing loans at lower interest rates, thus supporting consumer credit indirectly
. Together, these legislative measures during the Great Depression reshaped banking and consumer lending policies, demonstrating to commercial banks that consumer credit could be managed profitably and safely. The Glass-Steagall Act, in particular, laid the foundation for modern consumer lending by separating commercial and investment banking and fostering a more stable banking environment
