California Legislature—2013–14 Regular Session

Assembly Concurrent Resolution No. 73

Introduced by Assembly Member Roger Hernández

(Coauthor: Assembly Member Buchanan)

August 5, 2013

Assembly Concurrent Resolution No. 73—Relative to the Glass-Steagall Act.

LEGISLATIVE COUNSEL’S DIGEST

ACR 73, as introduced, 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WHEREAS, In 1999, Congress repealed these key provisions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banking and speculative activity embodied in the repealed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

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
Luigi Zingales and Lyndon LaRouche; Robert Reich, former Labor
Secretary under Bill Clinton; Stanford 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.