HF 1744

as introduced - 88th Legislature (2013 - 2014) Posted on 04/10/2013 11:04am

A resolution
memorializing Congress to enact legislation that would reinstate the separation of
commercial and investment banking functions in effect under the Glass-Steagall Act
(Banking Act of 1933).

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WHEREAS, the Glass-Steagall Act was repealed in 1999, permitting members of the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; NOW, THEREFORE,

BE IT RESOLVED by the Legislature of the State of Minnesota that it urges the President
and the Congress of the United States to enact legislation that would reinstate the separation of
commercial and investment banking functions in effect under the Glass-Steagall Act (Banking
Act of 1933). That Act prohibited 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.

BE IT FURTHER RESOLVED that the Secretary of State of the State of Minnesota is
directed to prepare copies of this memorial and transmit them to the President of the United
States, the President and the Secretary of the United States Senate, the Speaker and the Clerk
of the United States House of Representatives, the chair of the Senate Committee on Banking,
Housing, and Urban Affairs, the chair of the House Committee on Financial Services, and
Minnesota's Senators and Representatives in Congress.