Public Trust Designation — First Thoughts

The first musings towards a Regulatory Choice Framework.

“Public trust” would be, conceivably, a designation set at the discretion of an regulatory agency or legislature based on reasonable expectation or evidence that an industry locally or nationally has a propensity for fraud, consumer protection concerns, or the ability to do a high level of economic damage quickly without remedy.

An initial list of business categories or types would be set as public trust in legislation, and then a certain justification is required to add new or existing categories under public trust.

The designation would means that they are regulated through local license categories more stringently, and perhaps that there are particular consumer protection remedies available. (Statutory damages and a private right of action maybe? Very telephone consumer protection act…)

The public trust designation does require the agency to indicate the nature of the concern with the industry in regulation.

Industries and specific businesses may apply to have exemptions, which are revocable on an individual or category basis, to the public trust designation by showing that they have some sort of accreditation or other industry standard self-regulation. That self regulation can be a national standard or a local standard if they create a standard setting body. But it would require a certain amount of data and transparency to meet the requirement.

Public trust designations can also be removed through a petition process that requires a certain number of years of data and evaluation about the industry both locally and nationally (under the premise that new actors can show up and behave worse).

Thoughts on this idea for a basic local framework are very, very welcome.