SF 2334

as introduced - 88th Legislature (2013 - 2014) Posted on 03/06/2014 04:09pm

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

WHEREAS, an effective monetary and banking system is essential to the proper function
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WHEREAS, the Glass-Steagall Act was repealed in 1999, permitting members of the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 113th Congress, Representatives Marcy Kaptur (D-OH) and Walter
Jones (R-NC) introduced H.R. 129, the Return to Prudent Banking Act of 2013, to revive the
separation between commercial banking and the securities business that had been required
under the Glass-Steagall Act; and in the Senate, 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 S. 1282 to parallel the House bill; and

WHEREAS, the Return to Prudent Banking Act of 2013, H.R. 129, has 78 cosponsors,
including Representative Mike Coffman, 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 Legislature of the State of Minnesota that it urges the Congress
of the United States to enact legislation that would reinstate the separation of commercial and
investment banking functions that were in effect under the Glass-Steagall Act, the 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 Secretary of the United States Senate, the Speaker and the Clerk of the United
States House of Representatives, and Minnesota's Senators and Representatives in Congress.