There are two bills in Congressional committee waiting to be brought to the floor of Congress: Marcy Kaptur’s HR 1489 and Maurice Hinchey’s HR 2451. If either of these two bills are passed by Congress, it will restore the Glass-Steagall Act, a law which had kept financial institutions separate, by enforcing by law that banks either be commercial banking institutions (mortgages, savings, etc.) or financial investment institutions (derivatives, CDOs, etc.).
Originally, this law came into being in 1933 during the Great Depression. Over time, its provisions had been eroded by many new laws until it was, for the most part, completely overturned in 1999 with the Financial Services Modernization Act (aka. the Gramm-Leach-Bliley Act).
Congressmen, such as Byron Dorgan, spoke on the floor of Congress before the vote on the Gramm-Leach-Bliley Act and warned that this would lead to a disaster in the financial system. (1) Dorgan goes as far a forecasting the collapse of the financial markets and the ensuing bailouts.
Now, over ten years after the repeal of Glass-Steagall, we can see the repercussions of removing the firewall between investment and commercial banking. Restoring the Glass-Steagall Act now, will break up the “too big to fail” banks and force them to sink or swim based on their own fiscal integrity.
No more bailouts for the banks. Support HR 1489 and HR 2451. Demand Glass-Steagall now!