WHEREAS, an effective monetary and banking system is essential to the proper functioning of the economy; and
WHEREAS, an effective monetary and banking system must function in the public interest without bias; and
WHEREAS, the federal Banking Act of 1933, commonly referred to 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 firms; and
WHEREAS, the Glass-Steagall Act was repealed in 1999, permitting members of the financial industry to exploit the financial system for their own gain, in disregard of the public interest; and
WHEREAS, many financial industry entities were saved by the United States Treasury at a cost of billions of dollars to American taxpayers; and
WHEREAS, within the hundreds of pages of the Dodd-Frank Wall Street Reform and Consumer Protection Act, there are no prohibitions that prevent "too big to fail" financial services organizations from investing in or undertaking substantial risks involving trillions of dollars of derivative contracts; and
WHEREAS, the American taxpayers continue to be at risk for the next round of bank failures, as enormous risks are undertaken by financial services conglomerates; and
WHEREAS, in the 115th Congress, Representatives Marcy Kaptur (D-OH), for herself and on behalf of 26 other Representatives, introduced H.R. 790, the Return to Prudent Banking Act of 2017, to revive the separation between commercial banking and the securities business that had been required under the Glass-Steagall Act; and
WHEREAS,
in the 113
th
Congress, Senator Tom Harkin (D-IA) introduced S. 985 and Senators Elizabeth Warren (D-MA), Angus King (I-ME), John McCain (R-AZ), and Maria Cantwell (D-WA) introduced legislation to parallel a prior House bill on this subject; and
WHEREAS, the Return to Prudent Banking Act of 2013, H.R. 129, has 78 cosponsors, including Representative Mike Coffman (R-CO), chairman of the Congressional Balanced Budget Amendment Caucus; and
WHEREAS, Glass-Steagall has widespread national support from organizations such 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
LA Times,
and many others.
NOW, THEREFORE:
BE IT RESOLVED by the Senate of the 149
th
General Assembly, the House of Representatives concurring therein, that the Congress of the United States is urged to enact legislation that would reinstate the separation of commercial and investment banking functions that were in effect under the Glass-Steagall Act (Banking Act of 1933); and
BE IT FURTHER RESOLVED that federal legislation based on the Glass-Steagall precedent is needed in order to prohibit 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; and
BE IT FURTHER RESOLVED that the Secretary of the Senate shall send suitable copies of this resolution to the President of the United States, the President of the United States Senate, the Speaker of the United States House of Representatives, and the members of the Delaware Congressional Delegation so that they
may be apprised of the sense of the General Assembly in this matter.
