Glass-Steagall: An Idea Worth Reconsidering

WASHINGTON (May 20, 2013) – National Farmers Union (NFU) President Roger Johnson commends Sen. Tom Harkin (D-Iowa) and Rep. Marcy Kaptur (D-Ohio) for introducing legislation to reinstate the Glass-Steagall Act, which would help protect the U.S. economy from widespread collapse. Sen. Harkin’s bill was dropped in the Senate on May 13th – the 80th anniversary of the original enactment of Glass-Steagall.
 
“Congress must learn from the past in order to prevent future financial crises,” said Johnson. “The Federal Government, in its deregulatory zeal of the 1990s, repealed important laws like Glass-Steagall that separated commercial banking from investment banking. Doing so helped to set up the Great Recession.”
 
Glass-Steagall, or the Banking Act of 1933, prevented affiliations between banking and investment firms that could collapse simultaneously in a crisis. The Gramm-Leach-Bliley Act of 1999 repealed these provisions. The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 made some improvements, but stopped short of the safeguards provided by Glass-Steagall.
 
“Sen. Harkin and Rep. Kaptur deserve great thanks for bringing these reforms back to the table and I urge all members of Congress to support prudent financial protections.”