History of Banks
Timeline Outlining History of Banks
1791 Bank of the US: Received a charter in 1791 from Congress, which was signed by President Washington. This bank collected fees and made payments on behalf of the federal government. Bank went away because state banks opposed it; thought it gave too much power to the national government.
1816 Second Bank of the US: Second Bank of the United States was chartered in 1816. It failed because it did not regulate state banks or charter any other bank.
Civil War (printing currency): As state banks had been issuing their own personal types of currency, it made trade and commerce very complicated. This is why the federal government began printing a common currency around the time of the Civil War.
1863 National Banking Act: Banks were allowed to have a state or federal charter, which is also referred to as duel banking.
1913 Federal Reserve Act: The 1913 Federal Reserve Act established the Fed as the national bank, which also printed money/currency.
1930’s Great Depression (regarding banking): The Great Depression caused many banks to collapse because of the stock market crash. As a result, FDR established a "bank holiday" where banks were closed, and only allowed to reopen if they were able to prove that they were financially stable.
Glass-Steagall Banking Act: The Glass-Steagall Banking Act established the Federal Deposit Insurance Corporation, and also ensured that if a bank were to collapse, you would still have your money, and it would not be lost.
1970’s (regarding banking): In the 1970s, Congress relaxed restrictions placed upon banks at the time period.
1982 (regarding banking): Congress allowed Savings and Loans banks to make high risk loans and investments, and when investments went bad/banks failed, the federal government had to give investors their money back, putting them in $200 billion of debt, causing the FDIC, or Federal Deposit Insurance Commission to take over savings and loans banks.
1999 Gramm-Leach-Bliley Act: This act allowed banks to have more control over banking, insurance, and securities. The problems were that there was less competition which might form from a universal bank; which may lead to more sharing of information, and a reduction of privacy.