The Glass-Steagall Act (Act) was passed by the United States (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 The GLBA repealed most of the Act, including the requirement that commercial and investment banking activities remain separate.
The Joint Memorial requests that the US Congress reinstate the separation of commercial and investment banking functions that were in effect under the Act.
(In support) A joint memorial lets Washington, D.C. know the state's position on a policy, and it can be used as an organizing tool and form of education to inform constituents. When the Great Depression happened, some believed that the banks overreached and used savings deposits as resources for investments. It took four years to get the Act passed in Congress. The Act protected depositors from certain losses from speculations. When banks start leveraging savings for huge profits they get overextended. In 1999 the Act was eliminated, and some believe this led to the Great Recession. The banks were too big to fail because they were overleveraged, so taxpayers had to bail out the banks. This Joint Memorial asks for the state to say with one voice that it does not want to gamble savings in the stock market, and would rather see investments in local communities.
(Opposed) None.
Senator Bob Hasegawa, prime sponsor.