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ACR-73 The Glass-Steagall Act.(2013-2014)

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ACR73:v98#DOCUMENT

Amended  IN  Assembly  August 20, 2013

CALIFORNIA LEGISLATURE— 2013–2014 REGULAR SESSION

Assembly Concurrent Resolution
No. 73


Introduced by Assembly Member Roger Hernández
(Principal coauthor: Assembly Member Mansoor)
(Coauthor: Assembly Member Buchanan)

August 05, 2013


Relative to the Glass-Steagall Act.


LEGISLATIVE COUNSEL'S DIGEST


ACR 73, as amended, Roger Hernández. The Glass-Steagall Act.
This measure would urge the President and the Congress of the United States to enact federal legislation to protect the public interest by reviving the separation between commercial banking and speculative activity embodied in the Glass-Steagall Act.
Fiscal Committee: NO  

WHEREAS, An effective monetary and banking system is essential to the proper functioning of the economy; and
WHEREAS, In order to be effective, a monetary and banking system must serve the public interest; and
WHEREAS, The federal Banking Act of 1933, commonly referred to as the Glass-Steagall Act, contained key provisions that served the public interest by prohibiting commercial banks from engaging in the kinds of investment banking and speculative activity that contributed to the collapse of the banking system during the Great Depression; and
WHEREAS, In 1999, Congress repealed these key provisions of the Glass-Steagall Act, allowing commercial banks to engage in speculative activity once more; and
WHEREAS, The resulting commercial bank involvement in speculative activity worked against the public interest by placing the commercial banks themselves in financial jeopardy and contributing to the Great Recession; and
WHEREAS, Although, in 2010, Congress passed the Dodd-Frank Wall Street Reform and Consumer Protection Act to address the root causes of the recession, that act does not provide the same level of protection from speculative activity in the financial markets as the provisions of the Glass-Steagall Act did; and
WHEREAS, The public interest will continue to be at risk until commercial banks are prohibited from engaging in speculative activity again; and
WHEREAS, In the current Congress, Congresswoman Marcy Kaptur (D-Ohio) and Congressman Walter Jones (R-North Carolina) have introduced H.R. 129, and Senator Tom Harkin (D-Iowa) has introduced S. 985, known as the Return to Prudent Banking Act of 2013, to revive the separation between commercial banking and speculative activity embodied in the repealed provisions of the Glass-Steagall Act; and Act. Furthermore, Senator Elizabeth Warren (D-Massachusetts) has introduced S. 1282, known as the 21st Century Glass-Steagall Act of 2013, along with Senators John McCain (R-Arizona), Maria Cantwell (D-Washington), Angus King (I-Maine), Barbara Boxer (D-California), Barbara Mikulski (D-Maryland), Tammy Baldwin (D-Wisconsin), Edward J. Markey (D-Massachusetts), and Sheldon Whitehouse (D-Rhode Island), to reduce risks to the financial system by limiting the ability of banks to engage in certain risky activities and limiting conflicts of interest, as well as to reinstate certain Glass-Steagall Act protections that were replaced by the Gramm-Leach-Bliley Act; and
WHEREAS, The Return to Prudent Banking Act of 2013 received support from diverse, and sometimes opposing groups and individuals, including, but not limited to, all of the following: the AFL-CIO; the American Federation of Teachers; the International Association of Machinists; Thomas Hoenig, Vice Chair of the FDIC; David Stockman, former Chair of the Office of Management and Budget under Ronald Reagan; economists economist Luigi Zingales and Lyndon LaRouche; Zingales; Robert Reich, former Labor Secretary under Bill Clinton; Stanford Sanford Weill, former CEO of Citibank and leader of the effort to repeal the Glass-Steagall Act in 1999; and various state legislatures, more than 20 of which have filed resolutions urging Congress to restore the Glass-Steagall Act; now, therefore, be it
Resolved by the Assembly of the State of California, the Senate thereof concurring, That the Legislature urges the President and the Congress of the United States to enact federal legislation to protect the public interest by reviving the separation between commercial banking and speculative activity embodied in the Glass-Steagall Act; and be it further
Resolved, That the Chief Clerk of the Assembly transmit copies of this resolution to the President and Vice President of the United States, to the Speaker of the House of Representatives, to the Majority Leader of the Senate, to each member of California’s delegation to Congress, and to the author for appropriate distribution.