Regulatory Measures (Essay Sample)

Regulatory Measures
Name
Institution
Federal Sentencing Guidelines for Organizations (FSGO)
These are policies set out in the Federal court System that govern the sentencing of individuals and Organizations convicted by felonies. The guidelines were initially intended to be mandatory but are not mandatory now (United States v. Booker, 543 U.S 20 (2005) as the Supreme Court struck down the provisions. The introduction of these guidelines was a result of the issues revolving around the sentencing system whereby sentencing occurred within an unclear limit within a judge’s discretion. Criminals received different sentences before the coming of the guidelines. The new order enabled consideration on issues relating to the gravity of the crime, criminal history, deterrence, public protection and proper treatment of the criminal in ensuring rehabilitation of the criminal. Organizations establish ethics programs and make sure there is responsibility in conduct of business.
The Sarbanes
Oxley act is a legislation that ensures corporate disclosure in terms of protecting shareholders and the general public from malpractices in enterprise. It was established to address the rise in number of high profile financial scandals that occurred in early 2000 that led to loss of investor confidence (Margaret Rouse). The result of non-compliance to this act is fines and imprisonment.
Consumer financial Protection Bureau
It was created to address consumer issues within the financial sector as a response to the financial catastrophe of 2007-08 that brought about the great recession. America’s financial sector had gone too deep in lending issues that were unchecked. Carpenter (2012) argues that Congress was enforced to pass reforms following the crisis through a rigid system called the Dodd- Frank Wall Street Reform and Consumer Protection Act. Lydia DePillis (2014) describes CFPB as a “data obsessed start-up, forever iterating, laser-focused on the safety of consumers rather than the soundness of banks”.
Impact of these laws on business ethics
The National Business ethics survey has suggested that abusive and intimidating behavior towards workers has been a leading ethical matter. Leaders of corporate organizations have engaged in intimidating behavior over history and the establishment of these laws has been vital in regulating the level of this issue. According to Ethics and Compliance Program Survey 2010, the implementation of SOX is responsible for the increase of anonymous hotlines for reporting ethical questions and issues among corporations. This means corporations have developed to be responsible in handling ethical issues within its employee network. In early 2012, CFPB imposed the compensation of clients of Bank of America, Chase Bank, Capitol one and American Express subsidiaries where they were found of abusing the rights of its clients (Lydia, 2012). This has led corporate bodies to embrace values that inform good business ethics such as honesty, respect for employees and stakeholders, accountability, fairness among others.
Bill Hardekopf (2013)-The CFPB’S Accomplishments in its First Two Years
Carla (2013) notes that FSGO led to the creation of thousands of ethics programs and report from the Ethics Resource center that studied its operations for 20 years found that positive gains were realised. On the other hand, The Consumer Financial Protection Bureau(CFPB) has been instrumental in transforming business ethics where a number of achievements have been realized(Bill, 2013). The CFPB was able to handle over 175000 consumer complaints on credit cards, mortgages, student loans, bank accounts and auto loans (Bill, 2013). It has been vital in determining how companies treat and work with their personnel and the relationship is informed by mutual respect. There has been establishment of a complaints database that ensures complaints are addressed.
Financial institutions have also changed the way business is handled in relation to consumer debt. According to Bill(2013) banks, payday lenders, finance companies and other lenders shall be held accountable for unlawful conduct in collecting consumer debt.
William H. Donaldson Notes that for the fiscal year through August 20th 2003, the Securities and Exchange Commission concerning implementation of the act had filled 543 enforcement actions(William, 2003)