[Congressional Record Volume 159, Number 106 (Tuesday, July 23, 2013)]
[House]
[Pages H4861-H4862]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




     SUPPORT GLASS-STEAGALL AND A RETURN TO A SOUND BANKING SYSTEM

  The SPEAKER pro tempore. The Chair recognizes the gentlewoman from 
Ohio (Ms. Kaptur) for 5 minutes.
  Ms. KAPTUR. Mr. Speaker, in 1999, Congress, sadly, repealed the 
Glass-Steagall Act. That law had protected our Nation for over seven 
decades against wild speculation by Wall Street investment houses and 
financial giants.
  When the floodgates were removed between prudent banking and 
speculative abandon, again, Wall Street gambled with the money of the 
American consumers. Look where it took us, into the worst recession 
since the Great Depression, into a world where we've had the largest 
transfer in American history of wealth from Main Street to Wall Street; 
and the flood continues.
  Now, your savings deposits and certificates of deposits earn almost 
no interest. Guess who's making money off your money?

[[Page H4862]]

  In commemoration of the 80th anniversary of enactment of the Glass-
Steagall Act, Congress must adopt the Return to Prudent Banking Act of 
2013, H.R. 129. I invite all Members to cosponsor our bipartisan bill 
to reinstall the floodgates that protected the public from Wall Street 
greed.
  The Glass-Steagall Act, or Banking Act of 1933, was signed into law 
during the Great Depression in an effort to restore order and stability 
to the banking system. Representative Henry Steagall and Senator Carter 
Glass wrote the law and, through its passage, the Federal Deposit 
Insurance Corporation was created. The law prevented commercial banks 
from trading securities with deposits from their clients.
  After its repeal in 1999, the Wall Street banks, true to form, again 
created false money with abandon. They used that false money to 
purchase more mortgage-backed securities, which were packaged into 
collateralized debt obligations.
  Most Americans couldn't even define what these instruments were, but 
Wall Street giants ended up fleecing them by gobbling up an average of 
20 percent of the value of their home equity.
  Lack of regulation allowed Wall Street to gorge themselves past 
sustainable ratios. They manipulated consumer mutual funds and pension 
accounts of American workers, thus ensuring that Americans were on the 
hook for when the housing bubble burst.
  Sandy Weill, who helped invent these mad practices, as the former 
chairman and CEO of Citigroup, in a major reversal, stated on CNBC, in 
support of restoring Glass-Steagall, ``What we should probably do,'' he 
said, ``is go and split up the investment banking from regular banking, 
have banks be deposit takers, have banks do something that's not going 
to risk taxpayer dollars.''
  Boy, I wish he'd thought about that before he did it.
  Wall Street turned our strong banking system into a haven for 
speculators. They threw caution to the wind, displacing prudence with 
greed. These money men gained massive profits for the bank. By and 
large, the American public was unaware of their backroom dealing. But 
Wall Street took hard-earned Americans' dollars to gamble on complex 
and risky instruments like derivatives, and then filled the gap with 
the lost equity of the American people's homes.
  We now see enormous accumulation of banking assets and vast financial 
power in a handful of powerful institutions like JPMorgan Chase, 
Goldman Sachs, BlackRock. They are making enormous profits, larger than 
ever, as a result of the American people having bailed them out. 
Indeed, they are yielding the highest profits in our Nation, in 
addition to the oil companies.
  Fifteen years ago, the assets of these six largest banks were 
approximately 17 percent of gross domestic product. Today, estimates 
for their assets are over half of GDP. So six institutions control an 
enormous and growing percentage of our banking system and economy. And 
in turn, our Nation's future is placed at their doorstep.
  This is too much power in too few hands. The American people are 
feeling it in the restriction of credit, the sluggishness of the 
housing market and its depreciated values, the lack of interest paid on 
savings deposits and certificates of deposits, in the economy's 
sluggish growth, and the lack of competitive capital opportunities. In 
effect, the American people are subsidizing them.
  In 2012, JPMorgan Chase reported record net revenue of $21.3 billion, 
compared to the $19 billion they made in the previous year. For the 
third consecutive year, the banking giant recorded a record net income.
  Total revenue for JPMorgan Chase in 2012 was nearly $100 billion. 
That would fully fund the Department of Transportation, NASA, the 
National Science Foundation, and even bail out Detroit.
  Yes, let's look at Detroit. This weekend we saw the city of Detroit 
file for bankruptcy. The news stories report Detroit is $18 billion 
short, about a third of it in its pension funds.
  Well, look at what the financial crisis took from the citizens of 
Michigan, over $180 billion, 10 times more than the debt that the city 
of Detroit is juggling, $180 billion in lost property value in Michigan 
alone.
  Who should pay Detroiters in Michigan back for what was taken from 
them? And what was taken is the value of the value of their property. 
Now there's a math problem for you.
  I would say to my colleagues, please join us in sponsorship of H.R. 
129. Let's put prudence back into banking, and keep the speculators 
out.

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