1791: The First Bank of the US
In 1791, the first Bank of the US received charter from Congress and was signed by George Washington. The bank collected fees and made payment on behalf of the federal government. However, states though the bank gave too much power to the national government, so in 1811 its charter was abandoned.
1816: The Second Bank of the US
The Second Bank of the US was chartered in 1816. It lasted for a twenty year term until 1836, at which point it had failed because it didn't regulate state banks or charter any other banks.
1861: The Civil War and Printing Currency
The start of the Civil War in 1861 was the first time the federal government printed paper currency. There were Union currencies and Confederate currencies. They were created because of the necessary funds to help pay for the war.
1863: National Banking Act
This act, passed in 1863, made it so that banks could have a state or federal charter. This is called duel banking.
1913: Federal Reserve Act
This act, passed in 1913, created the Federal Reserve System. The Federal Reserve was given the power to print money and adjust the discount rate to affect the economy.
October 29, 1929 - 1939: The Great Depression
The Great Depression occurred because of a stock market crash. The people lost all their invested money. To make matters worse, everyone had just began using credit in large amounts. All their money was tied up in banks. However, all the banks crashed and they were uninsured. They had no money. In terms of banking, this made the need for regulations and insurance clear. Someone should not lose all their earnings simply because a bank crashes.
1933: Glass-Steagall Banking Act
This act, passed in 1933, established the Federal Deposit Insurance Corporation. This ensures that if your bank fails, you will still get your money back. This act was passed as a result of the Great Depression.
1970-1980: Banking in the 70's
During this time period, Congress relaxed restrictions on banking. This created a minor financial crisis. Money ran short and budget cuts had to be made all across the country. Inflation occurred, meaning currency became worth less.
1982: Banking Changes in 1982
During 1982, Congress allowed savings and loan banks to make high risk loans and investments. The investments went bad and banks failed. The federal government had to give investors their money back. The federal government debt leaped to $200 billion. The Federal Deposit Insurance Corporation took over the saving and loan banks.
1999: Gramm-Leach-Bliley Act
Passed in 1999, this act allowed banks to have more control over banking, insurance, and securities. However, this had some negative impacts. It made banks less competative, can cause a universal bank to form, and may lead to more sharing of information and therefore reduction of privacy.