Yesterday a resolution was reintroduced by Councilman Daniel Johnson (Louisville, KY), calling on Congress to reinstate Glass-Steagall. The text of the resolution appears below.
A RESOLUTION URGING CONGRESS TO PASS REPRESENTATIVE MARCY KAPTUR’S BILL HR 1489 KNOWN AS THE RETURN TO PRUDENT BANKING ACT. THIS WOULD REINSTATE THE SEPARATION OF COMMERCIAL AND INVESTMENT BANKING FUNCTIONS WHICH WERE IN EFFECT UNDER THE BANKING ACT OF 1933, COMMONLY REFERRED TO AS THE GLASS-STEAGALL ACT.
Sponsored By: Council Member Johnson
WHEREAS, an effective money and banking system is essential to the functioning of the economy; and
WHEREAS, such a system must function in the public interest, without bias; and
WHEREAS, since 1933, the Federal Banking Act (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WHEREAS, the Glass-Steagall Act was repealed in 1999, permitting the financial industry to exploit the system for their own gain in disregard of the public interest; and
WHEREAS, many of these entities were bailed out by the United States Treasury at a cost to American taxpayers of hundreds of billions of dollars; and
WHEREAS, within the hundreds of pages of the Dodd-Frank Act there are no prohibitions preventing “too big to fail” financial services organizations from investing in or undertaking substantial risks in trillions of dollars of derivative contracts; and
WHEREAS, the American taxpayers continue to be at risk for the next round of banking failures with enormous risks continuing to be undertaken by these financial service conglomerates; and
WHEREAS, Congresswoman Marcy Kaptur has introduced H.R. 1489, known as the "Return to Prudent Banking Act” to reinstate the Glass-Steagall Act; and
WHEREAS, H.R. 1489 has over 45 co-sponsors, and the Kentucky State AFL- CIO, the Kentucky State IBEW, the Louisville Building Trades, and many other local and national organizations have passed resolutions asking Congress to pass H.R. 1489.
NOW, THEREFORE, BE IT RESOLVED BY THE LEGISLATIVE COUNCIL OF THE LOUISVILLE/JEFFERSON COUNTY METRO GOVERNMENT (THE COUNCIL) AS FOLLOWS:
SECTION I: Louisville Metro Council urges the United States Congress to enact legislation to reinstate the Glass-Steagall restrictions (H.R. 1489) to prohibit commercial banks and bank holding companies from investing in stocks, underwriting securities, investing in, or acting as guarantors in derivative transactions, in order to prevent American tax payers from again being called upon to fund hundreds of billions of dollars to bail out financial institutions.
SECTION II: The Clerk of the Council shall transmit a copy of this Resolution to the President of the United States, the President of the United States Senate, the Speaker of the United States House of Representatives, the President of the KY State Senate and the presiding officer of the KY State House of Representatives, and to the State Assembly or House of Delegates of each state in the United States. The Clerk shall also transmit a copy to Representative John Yarmuth and the rest of the Kentucky Congressional Delegation and Congresswoman Marcy Kaptur.