Changes of the Banking Industry

Module 13 Lesson 2 Mastery Assignment

1791 Bank of the United States

Received a charter from the Congress which was for the bank to be able to collect the fees and make payments for the federal Government. It was soon opposed by the state banks due to it giving more power to the federal government.

1816 Second Bank of the US

The Second Bank of the US was chartered but failed because it did not properly regulate state banks and did not charter other banks.

1863 National Banking Act

This means that banks should be able to get state or federal charter also known as duel banking.

1913 Federal Reserve Act

Is the US Legislation that made the current Federal Reserve System. Was made to form a economic stability through a Central, Federal (National) Bank.

1930's Great Depression

The Great Depression was the thing that caused the banks to fail and collapse. In response to that Franklin D. Roosevelt declared a bank holiday where all banks are closed that day. They would not reopen until they proved that they were absolutely financially stable.

Glass-Steagall Banking Act

This act established the Federal Deposit Insurance Corporation (FDIC). This makes sure that that you still obtain your money even though a bank should fail or go under.


This is when congress relaxes restriction on the banks of the United States.


This is the time period when Congress allowed S & L banks to do high risk loans and investments. This was not the best decision because in that year investments went bad, banks went under, the Federal government had to reimburse investors, The Federal government debt was $2,000,000,000, and that is why FDIC took over S&L.

1999 Gramm-Leach-Bliley Act

This allows banks to obtain more control banking, insurance, and other securities. But this does have its bad sides. For example, there are less competition, it could make a universal bank, and could reduce privacy by more sharing of information.