Urging the New York State Congressional delegation to support efforts in the US House and US Senate to reinstate the Glass-Steagall Act

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LEGISLATIVE RESOLUTION urging the New York State Congressional deleg-
ation to support efforts in the US House and US Senate to reinstate the
Glass-Steagall Act, including the separation of commercial and invest-
ment banking functions in effect under the Glass-Steagall Act

WHEREAS, An effective money and banking system is essential to the func-
tioning of the economy; and
WHEREAS, Under the American System policies of Alexander Hamilton,
such a healthy banking system should provide credit to multiply the
productive manufacturing, agricultural, and scientific ventures and
activities of the nation; and
WHEREAS, The Federal Banking Act of 1933, commonly referred to as the
Glass-Steagall Act, stated in its introduction that the Act was written:
"to provide for the safer and more effective use of the assets of banks,
to prevent the undue diversion of funds into speculative operations, to
regulate interbank control, and for other purposes"; and
WHEREAS, From 1933 to 1999, 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;
WHEREAS, The Glass-Steagall Act was repealed in 1999, permitting the
financial industry to exploit the financial system for their own gain in
disregard of the public interest, and contributing to the 2007-2008
financial crash and bailout, and the greatest speculative bubble and
worldwide recession since the Great Depression; and
WHEREAS, This resulted in millions of foreclosures nationwide as well
as the loss of millions of jobs, and the creation of financial strains
on states, counties and cities, and exacerbated unemployment and the
loss of social services, and the availability of productive credit; and
WHEREAS, American taxpayers were billed trillions of dollars in bail-
outs and transfer of savings during this crisis; and
WHEREAS, Despite this cost, financial instability has grown, such that
the major Wall Street banks are now, in 2015, 30% larger in bad liabil-
ities than in 2008, and are holding over $300 trillion in derivatives
contracts, as part of over $800 trillion held worldwide -- the same
securities that collapsed in 2008, and resulted in the bailout; and
WHEREAS, In December, 2014, and January, 2015, the Wall Street banks
successfully pressured Congress to delay implementation of the "Volcker
Rule" until 2019, and to totally remove Section 716, the "Lincoln Amend-
ment" from the Dodd-Frank "Wall Street Reform and Consumer Protection
Act", thus making commercial banks and US taxpayers liable for another
$50 trillion or more in commodity and other exotic derivatives, all of
which would be outlawed under Glass-Steagall; and
WHEREAS, Thomas Hoenig, the Vice Chairman of the Federal Deposit
Insurance Corporation spoke of the danger to the FDIC safety net and the
banking system in March of 2015, referencing the take-down of Glass-
Steagall, as resulting in the government's subsidization of dangerous
financial speculation, and allowing conflicts of interest and the manip-
ulation of the FDIC safety net; and
WHEREAS, The call to reinstate Glass-Steagall, has received widespread
national support from prominent economic, banking, labor, academic,
legislative and business leaders from all parties, and many of the major
and respected national newspapers; and
WHEREAS, The United States Senate and House of Representatives have
been making efforts to restore the protections of the Glass-Steagall
Act, and Congressional representatives and Senators have submitted bills
to that effect, including four bills in the 2014 (113th) Congressional

session -- HR 129, HR 3711, S. 1282, S. 985 -- with 83 co-sponsors on HR
129; and
WHEREAS, In the 2015 (114th) session, HR 381 ("The Return to Prudent
Banking Act of 2015") has been introduced with 33 co-sponsors listed in
the first three months of the session, including 3 New York Congression-
al representatives; and
WHEREAS, Prominent political figures and governments throughout Europe
are now debating similar Glass-Steagall bills in their governing bodies,
including in Italy, Iceland, Switzerland, and others, to preempt future
collapse of the European debt bubble; and
WHEREAS, The European debt and derivatives bubble are inextricably
linked to the same financial markets in the United States, and the
United States should take significant steps to protect its investments
and the investments of its citizens; now, therefore, be it
RESOLVED, That this Legislative Body pause in its deliberations to
urge the entire New York State Congressional delegation to support and
enact in Congress the legislation that would reinstate the Glass-Stea-
gall Act, including the separation of commercial and investment banking
functions that were in effect under Glass-Steagall, thus securing a safe
American banking system, which can protect deposits, and supply needed
credit for a productive economy, protect state finances and the well-be-
ing of our citizens, and remove any national protection of investment in
stocks, underwriting of securities or investing in or acting as guaran-
tors to derivative transactions or other activities deemed "non-bank"
activities under the Glass-Steagall law; and be it further
RESOLVED, That copies of this Resolution, suitably engrossed, be tran-
smitted to each member of the New York State Congressional delegation.


  • 10 / Apr / 2015

Resolution Details

Law Section:
Resolutions, Legislative


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