Changes to the banking industry

1791 Bank of the US

The first bank of the US signed by President George Washington. It's job was to collect fees and make payments on behalf of the federal government. It was needed because of the extreme debt from the Revoluntionary War and all states had different kinds of money. Was ended becuase state banks thought it gave national banks to much power.

1816 Second Bank of the US

The second bank had the same responisbilites and powers as the first bank of the US. The bank had poor management and outright fraud. It failed for not regulating state banks or chartering any other bank.

Civil War printing currency

Federal government didn't print paper currency until the Civil War. Before this banks printed paper money. The Legal Tender Act of 1862 allowed the government to do the printing of the money not each bank.

1863 National Banking Act

Banks could have dual banking, meaning state or federal charter. Congress passed the act to try to help fix the financial crisis that occured during the early part of the Civil War.

1913 Federal Reserve Act

Signed in by President Woodrow Wilson. The central bank of the US it is a national bank. It was created to form economic stability. The Federal Reserve Bank oveersees commerical banks, enforces laws dealing with consumer borrowing and acts as governments bank. Controls money policy.

1930’s Great Depression (regarding banking)

The Great Depression caused banks to collapse. Franklin D. Roosevelt declared a bank holiday that closed the banks only allowing them to reopen if they could prove they were financially stable.

Glass-Steagall Banking Act

Occured in 1933 and separated investment and commerical banking activites. Established the Federal Depoist Insurance Corporation which ensures that if a bank goes under people still have their money.

1970’s (regarding banking)

Congress relaxes their restrictions on banks. The banks were allowed to offer more financial services.

1982 (regarding banking)

Laws allowed S&L to diversify their activites to increase profits. Banks failed causing the federal governement to have to pay back investors. The FDIC took over the S&L (savings & loans). The federal governement debt was 200 billion dollars.

1999 Gramm-Leach-Bliley Act.

Allows banks to have more control over banking, securities and insurances. Provides limited privacy protections against the sale of your private financial information. End regulations that prevented the merger of banks, stock brokerage companies, and insurance companies.