I think ideas like this is why it's not going to happen.
Our understanding of mental health is garbage. Psychiatry used to be full of quackery and very well still might be. Treatment for something like depression boils down to "let's try drug in a random order until one works". It's a field where a coin-flip rivals the accuracy of studies. Therefore any regulating body on that will just be political. It will be all about the regulators "doing something" because somebody wrote enough articles (propaganda).
Problems like this are why people aren't interested in supporting such endeavors.
this argument reduces mental health to medication, which leaves aside everything from the history of mental health (asylums, witch burnings to today), leaps in medicine (from lobotomies, to SNRIs, bipolar meds and more), to simply better diagnoses.
There are certainly tons of people here who have benefited from mental health professionals - overextending the flaws in psych simply to dismiss the idea of a watchdog is several unsupported arguments too far.
There are some non-medication treatments for some psychiatric symptoms such as those caused by trauma (Prominently, EMDR) that some hail as actual cures, and even maybe depression (I am clearly not a doctor.) but in the case of depression I think you'll find its quite medication-heavy.
The reason for this is that psychiatrists are Medical Doctors and Psychiatry is a medical field which is of course bounded by the means of medical science. This is not to say there is some "magic" at work which science could never understand--not at all. It is merely the case that medical doctors are a research paper oriented bunch, and most of the medical research which makes it into practice is either relating to anatomy or pharmaceutical interventions.
Most of the treatments we have are pharmaceutical medications because most of our research dollars have gone into pharmaceutical research.
I decided to edit this comment to add: In my personal opinion, is probable that psychiatrists et all, writ large as it were, have already figured out how to cure depression. Only, we cannot really manage to employ it because it isn't a pill, therapy, device or surgery.
There a whole host of 'sciences' that are kind of 2nd tier like this, Psychiatry being one of them. Once we understand enough Neuroscience, it's likely to me Psychiatry will get consumed by Neuroscience which will splinter into more useful for day to day life categories as it grows (like a psychiatrist)
Super book on the subject and also talks about the rising bar for individual culpability as we understand more about the brain: https://www.amazon.com/Incognito-Secret-Lives-David-Eagleman...
As nice as this is on paper, it will never happen, lobbyist exists. Not to be tinfoil hat but why would any lawmaker slap the hand that feeds them.
Until there is an independent governing body which is permitted to regulate over the tech industry as a whole it wont happen. Consider the FDA, they decide which drugs and ingredients are allowed and that's all fine. There could be a regulating body which could determine the risk to people's mental health for example from 'features' of tech companies etc. But getting that body created will require a tragedy. Like why the FDA was created in the first place. [1]
That's just my 2cents.
1 : https://www.fda.gov/about-fda/fda-history/milestones-us-food....