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Washington State and South Carolina Introduce State Memorials to Congress to Restore Glass Steagall Act
Washington State Resolution
SENATE JOINT MEMORIAL 8005
State of Washington 64th Legislature 2015 Regular Session
By Senators Hasegawa, Chase, Kohl-Welles, Rolfes, Keiser, Darneille,
Cleveland, Frockt, Jayapal, and Conway
Read first time 01/20/15. Referred to Committee on Financial
Institutions & Insurance.
TO THE HONORABLE BARACK OBAMA, PRESIDENT OF THE UNITED STATES,
AND TO THE PRESIDENT OF THE SENATE AND THE SPEAKER OF THE HOUSE OF REPRESENTATIVES, AND TO THE SENATE AND HOUSE OF REPRESENTATIVES OF THE UNITED STATES, IN CONGRESS ASSEMBLED:
We, your Memorialists, the Senate and House of Representatives of the State of Washington, in legislative session assembled, respectfully represent and petition as follows:
WHEREAS, An effective money and banking system is essential to the functioning of the economy; and
WHEREAS, Such a system must function in the public interest, without bias; and
WHEREAS, Since 1933, the federal banking act of 1933, known as the Glass-Steagall act, protected the public interest in matters dealing with the regulation of commercial and investment banking, in addition to insurance companies and securities; and
WHEREAS, The Glass-Steagall act was repealed in 1999, partially contributing to the greatest speculative bubble and worldwide recession since the great depression of 1933; and
WHEREAS, The worldwide recession has left millions of homes in foreclosure; and
WHEREAS, The worldwide recession has caused the loss of millionsof jobs nationwide; and
WHEREAS, The worldwide recession has put severe financial strains on states, counties, and cities, exacerbating unemployment and the loss of civil services; and
WHEREAS, The United States senate and house of representatives have been making efforts to restore the protections of the Glass- Steagall act; and
WHEREAS, Congresswoman Marcy Kaptur has introduced H.R. 381, known as the return to prudent banking act of 2013, which revives the separation between commercial banking and the securities business in the manner provided in the Glass-Steagall act; and
WHEREAS, The Glass-Steagall act has widespread national support from such organizations as the American federation of labor and congress of industrial organizations (AFL-CIO), the American federation of teachers, and the international association of machinists, as well as from prominent economic and business leaders, including Thomas Hoenig of the FDIC, Sanford Weill, former CEO of Citigroup, economist Luigi Zingales, the New York Times, the St. Louis Post Dispatch, the Los Angeles Times, and many others;
NOW, THEREFORE, Your Memorialists respectfully pray that Congress enact legislation that would reinstate the separation of commercial and investment banking functions that were in effect under the Glass-Steagall act, prohibiting commercial banks and bank holding companies from investing in stocks, underwriting securities, or investing in or acting as guarantors to derivative transactions, in order to prevent American taxpayers from being called upon to fund hundreds of billions of dollars to bail out financial institutions;
BE IT RESOLVED, That copies of this Memorial be immediately transmitted to the Honorable Barack Obama, President of the United States, Congresswoman Marcy Kaptur, the President of the United States Senate, the Speaker of the House of Representatives, and each member of Congress from the State of Washington.
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South Carolina Legislature Introduces Resolution to Congress to Restore Glass Steagall Act
A CONCURRENT RESOLUTION H 4486
TO MEMORIALIZE THE UNITED STATES CONGRESS TO REENACT CERTAIN PROVISIONS OF THE GLASS-STEAGALL ACT THAT WERE ESSENTIAL TO PROVIDING STABLE ECONOMIC MARKETS FOLLOWING THE GREAT DEPRESSION BUT WHICH WERE REPEALED IN 1999, CONTRIBUTING SUBSTANTIALLY TO HIGH-RISK BANKING AND INVESTMENT PRACTICES THAT CAUSED THE GREAT RECESSION.
Sponsors--Rep. Neal and Clyburn
Whereas, in the aftermath of the Great Depression, the United States Congress enacted the Banking Act of 1933, popularly known as the Glass-Steagall Act, which established the FDIC and imposed many various banking reforms including provisions restricting affiliations between banks and securities firms; and
Whereas, in 1999, Congress enacted the Gramm-Leach-Bliley Act, also known as the Financial Services Modernization Act of 1999, which repealed Sections twenty and thirty-two of the Glass-Steagall Act, which prohibited any one financial institution from acting as any combination of an investment security firm, a commercial bank, and an insurance brokerage; and
Whereas, the repeal of these provisions of the Glass-Stegall Act resulted in the growth of large banks that sought to generate tremendous fees by engaging in reckless practices such as lowering mortgage lending standards to generate a greater number of high-risk or subprime mortgages which were bundled and traded in the financial markets; and
Whereas, when the nation's economy slowed and borrowers were unable to make payments on these subprime mortgages, a rash of foreclosures ensued, causing millions of Americans to lose their homes and obliterating the value of mortgage-based investments, which resulted in a dramatic loss of capital in our nation's banking system and virtually ending the availability of credit, which previously had enabled our nation to prosper overall; and
Whereas, as a result, in 2008, the United States faced an economic catastrophe of an epic scale not seen since the Great Depression, or worse, while the very banks that had engaged in such foolhardy conduct became considered "Too Big to Fail" and had to be rescued with public funds; and
Whereas, although subsequently enacted reforms addressed many issues underlying the financial crisis, the most astute path would be to reenact the repealed provisions of the Glass-Stegall Act that contributed to the financially sound lending practices on which our nation's economy remained relatively stable for over five decades following the Great Depression, until undone by the repeal. Now, therefore,
Be it resolved by the House of Representatives, the Senate concurring:
That the members of the General Assembly of the State of South Carolina, by this resolution, memorialize the United States Congress to reenact certain provisions of the Glass-Steagall Act that were essential to providing stable economic markets following the Great Depression but which were repealed in 1999, contributing substantially to high-risk banking and investment practices that caused the Great Recession.
Be it further resolved that a copy of this resolution be forwarded to the President of the United States Senate, the Speaker of the United States House of Representatives, and each member of the South Carolina Congressional Delegation.