Module 13 Lesson 2 Mastery
1791 Bank of the U.S.
In 1791, Congress gave the bank of the U.S. a charter that was signed by President George Washington. The federal government allowed the US Bank to collect fees and make payments. However, the bank soon shut down because state banks did not like it and it gave too much power to the national government.
1816 Second Bank of the U.S.
Chartered in 1816, the country obtained another bank. This bank also shut down because it did not charter or regulate the state banks. The state banks also decided that they would issue their own currency.
Civil War Printing Currency and 1863 National Banking Act
After the shut down of the second U.S. Bank in 1816, later on during the Civil War, the Federal Government then decided to print paper currency. In 1863 (During the Civil War), Banks obtained the ability to duel banking: federal chartering or state. Paper Currency was created when the National Banking Act had an amendment to it. This amendment made taxation on state bank notes mandatory, but not national notes, which then helped develop the national paper currency.
1913 Federal Reserve Act
In 1913, the National Bank was created again this time as the Federal Reserve Act law, signed by President Woodrow Wilson.
1930's Great Depression (Banking)
In the 1930's the Great Depression affected many people and businesses, including banks that collapsed. President FDR created a "bank holiday" where closed banks were only allowed to open if they were absolutely financially stable.
Glass Steagall Banking Act 1933
The Glass Stegall Banking Act founded the Federal Deposit Insurance Corporation. This promised that if a Bank were to fail, a person would still have their money.
1970's Bank Facts
In the 1970's, Congress decided to relax it's restrictions on banks, there was also a high amount of inflation, with oil,consumer, and, producer prices increasing dramatically. The federal deficit also increased dramatically.
1982 Bank Facts
Congress permitted Local and State banks to make large risk loans and investments. Later on, investments showed negative results that caused banks to fail, and made the Federal Government give back money to the investors. This then made the Federal government 200 billion dollars in debt. Then, the FDIC took over the State and Local banks.
1999 Gramm-Leach-Bliley Act
The 1999 Gramm-Leach-Bliley Act allowed banks to have more power and control over banking, securities, and insurance. However the negative side to this was: less competition, the possibility of universal bank forming, and the possible reduction of privacy through shared information.
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(Notes from Module 13 Presentations in ncvps)