Washington State
House of Representatives
Office of Program Research
BILL
ANALYSIS
Consumer Protection & Business Committee
SJM 8005
Brief Description: Requesting that Congress enact legislation that would reinstate the separation of commercial and investment banking functions that were in effect under the Glass-Steagall act.
Sponsors: Senators Hasegawa, Stanford, Trudeau and Wellman.
Brief Summary of Joint Memorial
  • Requests the US Congress to reinstate the separation of commercial and investment banking functions that were in effect under the Glass-Steagall Act. 
Hearing Date: 3/19/25
Staff: Megan Mulvihill (786-7304).
Background:

The Glass-Steagall Act (Act) was passed by the US Congress in 1933, and is also known as the Banking Act of 1933.  The Act was sponsored by Senator Carter Glass and Representative Henry Steagall, and it was passed in response to the 1929 stock market crash and failure of thousands of banks during the Great Depression.  One of the major functions of the Act was that it prohibited commercial banks from participating in the investment banking business.  Commercial banks were prohibited from engaging in securities underwriting while investment banks were prohibited from accepting deposits from consumers.  Only 10 percent of commercial banks' total income could stem from securities under the Act.

 

The Gramm-Leach-Bliley Act of 1999 (GLBA) was passed by the US Congress on November 12, 1999.  The GLBA repealed most of the Act, including the requirement that commercial and investment banking activities remain separate.
Summary of Bill:

The Joint Memorial requests that the US Congress reinstate the separation of commercial and investment banking functions that were in effect under the Glass-Steagall Act. 
Appropriation: None.
Fiscal Note: Not requested.