Changes in the banking industry
1791 Bank of the U.S.
This bank received a 20 year charter from congress, which was signed by President Washington. The duties of this bank included: collecting fees and making payments on behalf of the federal government. The bank closed due to the fact that the states thought it gave too much power to the federal government.
1816 Second Bank of the U.S.
This was the second bank of the United States and was charted in the year 1816. This bank failed because it did not regulate state banks or charter any other bank.
Civil War (Printing Currency)
This is when the federal government decided to start printing paper currency. They did this because they had to find a new way to pay for such an expensive war. One year prior to the war the United States debt was $64.8 million, and once war began the debt began to grow dramatically.
1863 National Banking Act
This was when "dual banking" began, banks were allowed to have a state or federal charter. Congress passed this act to help resolve financial crisis the evolved during the civil war.
1913 Federal Reserve Act
This created and established the Federal Reserve System (the fed). It also granted it the legal authority to issue Federal Reserve Notes or the U.S. dollar. This act was signed into law by President Woodrow Wilson.
1930's Great Depression
FDR declared what he called a "bank holiday" where banks were forced to close until they could prove that they were financially stable. This began in about 1929 and lasted until 1939. It was the longest and most severe great depression in the industrialized western world.
Glass Seagall Banking Act
This established the Federal Deposit Insurance Corporation. This ensured that if a bank went under you still had your money. This act came into place after the great depression.
Banking in the 1970's
During the 70's the congress relaxed restrictions on banks. Banks were very strict up until this point, you didn't have calculators and you had to be quite as if you were in a library. The hours of operation were from 9:00 until 3:00.
Banking in 1982
During this year congress allowed S&L banks to make high risk loans and investments. Investments went bad, banks failed. In some cases the federal government even had to give investors their money back. The debt for the federal government went up $200 billion and finally the FDIC took over the S&L
1999 Gramm-Leach-Bliley Act
This allowed banks to have more control over banking, insurance and securities. Unfortunately there was less competition, may form a universal bank which may lead to more sharing of information.