SENATE MEMORIAL 37

51st legislature - STATE OF NEW MEXICO - second session, 2014

INTRODUCED BY

William P. Soules

A MEMORIAL

URGING THE NEW MEXICO CONGRESSIONAL DELEGATION IN WASHINGTON, D.C., TO SUPPORT EFFORTS TO REINSTATE SEPARATION OF COMMERCIAL AND INVESTMENT BANKING FUNCTIONS IN EFFECT UNDER THE BANKING ACT OF 1933.

     WHEREAS, an effective money and banking system is essential to a functional economy; and

     WHEREAS, such a system must function in the public interest without bias; and

     WHEREAS, since 1933, the federal Banking Act of 1993, also known as the Glass-Steagall Act, protected the public interest through the regulation of commercial and investment banking, insurance companies and securities; and

     WHEREAS, the Glass-Steagall Act was repealed in 1999, permitting members of financial institutions to exploit the financial system for their own gain with disregard of the public interest, contributing to the greatest speculative bubble and global economic crisis since the great depression; and

     WHEREAS, the worldwide economic collapse has left millions of homes in foreclosure, has cost millions of jobs nationwide and has put severe financial strain on states, counties and cities, exacerbating unemployment and the loss of social services; and

     WHEREAS, many financial industry entities were bailed out by the United States department of the treasury at a cost of hundreds of billions of dollars to American taxpayers; and

     WHEREAS, the United States house of representatives and the United States senate have been making efforts to restore the protections of the Glass-Steagall Act; and

     WHEREAS, United States Representative Marcy Kaptur has introduced H.R. 129, known as the Return to Prudent Banking Act of 2013, which would revive the separation between commercial banking and the securities business in the manner provided by the Glass-Steagall Act; and

     WHEREAS, United States Senator Elizabeth Warren, along with United Sates Senators John McCain, Maria Cantwell and Angus King, has introduced the 21st Century Glass-Steagall Act of 2013 (S. 1282), which would reduce risk for American taxpayers in the financial system and decrease the likelihood of future financial crisis; and

     WHEREAS, the reinstatement of the Glass-Steagall Act has widespread national support from prominent economic, banking, labor, academic, legislative and business leaders, including the American federation of labor and congress of industrial organizations; the united federation of teachers; the international association of machinists and aerospace workers; Thomas Hoenig, vice chair of the federal deposit insurance corporation; and David Stockman, director of the office of management and budget under President Ronald Reagan; and

     WHEREAS, twenty-two state legislatures have introduced measures urging congress to reinstate the provisions of the Glass-Steagall Act;  

     NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF NEW MEXICO that congress and the president of the United States be urged to support the passage of the Return to Prudent Banking Act of 2013 and to enact legislation that would reinstate the separation of commercial and investment banking functions that were in effect under the federal Banking Act of 1933; and

     BE IT FURTHER RESOLVED that such legislation should prohibit commercial banks and bank holding companies from investing in stocks, underwriting securities or investing in, or acting as, guarantors to derivative transactions, to prevent American taxpayers from being called upon to fund the bailout of financial institutions; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the president of the United States, each member of the New Mexico congressional delegation and the chief clerks of the house of representatives and the senate of the United States congress.

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