REFERENCE TITLE: urging Congress; Glass-Steagall act

State of Arizona Senate Fifty-third Legislature Second Regular Session 2018

SCM 1001

Introduced by Senators Mendez: Cajero Bedford, Contreras, Dalessandro, Otondo, Peshlakai, Quezada; Representatives Andrade, Benally, Blanc, Cardenas, Clark, Engel, Fernandez, Gabaldón, Peten, Salman

 

A CONCURRENT MEMORIAL

 

Urging the United States Congress to enact legislation similar to H.R. 381, the Return to Prudent Banking Act of 2015, and S. 1709, the 21st Century Glass-Steagall Act of 2015.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 

To the Congress of the United States of America:

Your memorialist respectfully represents:

Whereas, an effective monetary and banking system is essential to the proper functioning of the United States economy; and

Whereas, an effective monetary and banking system must function in the public interest without bias; and

Whereas, certain provisions of the 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Whereas, the Glass-Steagall Act was repealed in 1999, during the Clinton Administration, contributing to the greatest speculative bubble and worldwide recession since the Great Depression by permitting members of the financial industry to exploit the financial system for their own gain in disregard of the public interest; and

Whereas, the worldwide recession caused the loss of millions of jobs nationwide and contributed to the foreclosure of millions of homes, while many financial industry entities were saved by the United States Treasury at the cost of billions of dollars to the American taxpayers; and

Whereas, the worldwide recession also put severe financial strains on states, counties and cities, exacerbating unemployment and the loss of civil services; 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 in jeopardy of the next round of bank failures as enormous risks are undertaken by financial services conglomerates; and

Whereas, since 2011, bipartisan legislation has been introduced in both the United States Senate and the United States House of Representatives to revive the separation between commercial banking and the Wall Street securities business in the manner provided in the Banking Act of 1933, the so-called Glass-Steagall Act; and

Whereas, on January 14, 2015, Democratic Congresswoman Marcy Kaptur introduced H.R. 381, known as the Return to Prudent Banking Act of 2015, with cosponsor Republican Congressman Walter Jones; and

Whereas, on July 7, 2015, United States Senators Elizabeth Warren, Maria Cantwell, John McCain and Angus King introduced S. 1709, the 21st Century Glass-Steagall Act of 2015, which would reduce risk for American taxpayers in the financial system and decrease the likelihood of future financial crises; and

Whereas, reinstatement of the Glass-Steagall Act provisions has widespread national support from prominent economic and business leaders and national publications, including Thomas Hoenig of the Federal Deposit Insurance Corporation, former Citigroup Chief Executive Officer Sanford Weill, economist Luigi Zingales, the New York Times, the St. Louis Post‑Dispatch, the Los Angeles Times and many others; and

Whereas, to date, legislation requesting action to restore the Glass‑Steagall standard has been introduced in one or both legislative chambers in more than half the states.  Legislative bodies in at least four states have passed those resolutions, and in the remaining states legislative action is still pending; and

Whereas, overwhelming pressure must be brought to bear on members of the United States House of Representatives and United States Senate to take action to pass this important legislation.

Wherefore your memorialist, the Senate of the State of Arizona, the House of Representatives concurring, prays:

1.  That the Members of the United States Congress enact legislation similar to H.R. 381, the Return to Prudent Banking Act of 2015, and S. 1709, the 21st Century Glass‑Steagall Act of 2015.

2.  That the Members of the United States Congress and the President of the United States enact legislation that, in order to prevent American taxpayers from funding hundreds of billions of dollars to bail out financial institutions, would reinstate the separation of commercial and investment banking functions in effect under the Glass-Steagall Act by prohibiting commercial banks and bank holding companies from investing in stocks, underwriting securities or investing in or acting as guarantors to derivative transactions.

3.  That the Secretary of State of the State of Arizona transmit copies of this Memorial to the President of the United States, the President of the United States Senate, the Speaker of the United States House of Representatives, each Member of Congress from the State of Arizona, United States Representatives Marcy Kaptur and Walter Jones and United States Senators Elizabeth Warren, Maria Cantwell, John McCain and Angus King.