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Text of Rep. Marcy Kaptur's 'Dear Colleague' letter on Glass-Steagall
April 26, 2011 • 8:29PM
The full text is as follows:
Reinstate Glass-Steagall
Cosponsor H.R. 1489,
“The Return to Prudent Banking Act”
Dear Colleague:
I am writing to request your support for H.R. 1489, “The Return to Prudent Banking Act.” I recently reintroduced this legislation to strengthen our financial system by reinstating Glass-Steagall.
In response to the failure of thousands of banks across the country, Congress enacted the Banking Act of 1933, commonly known as Glass-Steagall, during the height of the Great Depression. This statute safeguarded the American economy for decades by legally separating commercial and investment banking. Such a common sense system provided greater security to banking deposits in commercial banks. Additionally, investment banks were only able to leverage their own funds, limiting the systemic risks of the American citizenry. For decades, Glass-Steagall was a cornerstone of the U.S. financial system, until the Gramm Leach Bliley Act unwisely completely ended this important financial regulation in 1999.
With the repeal of the Glass-Steagall Act over a decade ago, the U.S. economy was exposed to an intolerable level of risk, and the recent financial crisis was certainly exacerbated by the removal of these safeguards. I believe that we must limit the potential for future economic collapses by returning to a more prudent banking system in which banks must once again choose between investment activities or commercial lending. If you would like more information or would like to become a co-sponsor of H.R. 1489, please contact John Brodtke in my office at john.brodtke@mail.house.gov.
