Assemblymember Phil Steck (D-Colonie) announced that he is sponsoring a resolution urging congressional passage of the Return to Prudent Banking Act of 2013 (K.490). The congressional bill would establish stronger regulations in the federal banking system and reinstate the separation of commercial and investment banking functions in effect under the Glass-Steagall Act (H.R. 129).

“Ever since the stock market collapse in 2008, the worldwide recession put millions of homes into foreclosure, cost countless jobs and pushed states to their fiscal breaking points,” Assemblymember Steck said. “The financial institutions that pushed the country to the brink of economic ruin were bailed out by the federal government, costing billions of hard-earned tax dollars. We can’t allow taxpayers to shoulder the burden when the next bank failure happens. Congress must act now to put in place stronger regulations to protect our families and stop banks from gambling with other people’s money.”

According to Assemblymember Steck’s resolution, The Federal Banking Act of 1933, also known as the Glass-Steagall Act, was put in place after the collapse of the stock market in 1929 to protect the public interest in matters dealing with the regulation of commercial and investment banking and to avoid a financial collapse of that magnitude from occurring again. Unfortunately, when this act was repealed in 1999, it allowed members of the financial industry to exploit the system for their own gain and make risky and complicated transactions that contributed to the worst recession since the Great Depression. The Return to Prudent Banking Act of 2013 would strengthen regulations and safeguard American taxpayers from another massive bank bailout, Assemblymember Steck noted.

“If something isn’t done to restore these critical regulations, there is nothing in place to stop commercial banks and powerful CEOs from causing the same mess we had in 2008 – one that we’re still trying to dig ourselves out of,” Assemblymember Steck said. “Congress must take action and make sure that taxpayers are protected from another unnecessary financial disaster.”

The congressional bill to restore of the Glass-Steagall Act is sponsored by several New York Congress members, including Rep. Paul Tonko, Rep. Charles Rangel, and Rep. Louise Slaughter. The legislation also has widespread national support from prominent economic, banking, labor, academic, legislative and business leaders.