New Administration Taking Steps to Enhance Consumer Protection

In recent years, federal regulations have been used to scale back state law consumer protection measures. Under the legal doctrine of preemption, federal laws and regulations take precedence over inconsistent or conflicting state laws. The Bush administration used this concept to protect big industry at the expense of consumer safety by inserting preemptive language into the preambles of proposed federal rules. As a result, much of the key operative language was not open for public comment prior to the regulation’s adoption.

President Obama has taken steps to reverse this sinister trend. In a recently released memorandum, the White House called on federal agencies such as the FDA to end the practice of placing preemptive language in the preamble unless the language is contained elsewhere in the regulation. In addition, agencies are discouraged from using preemptive language unless it would be justified in light of states’ inherent power to protect the health and safety of their citizens. Federal agencies have been directed to review regulations from the past 10 years to ensure compliance with the new standard.

Federal preemption has served as a shield for big industries, allowing huge corporations to take advantage of lax federal regulations and avoid more stringent state laws. The new directive should help rein in the banking industry and drug manufacturers by providing consumers with state-level remedies. This increased accountability will hopefully lead to safer and more reliable products and services.