U.S. Banking Industry Timeline
The Changes Overtime
1791 Bank of the United States
They received a charter in 1791 from Congress that was signed by President Washington.
The bank collected fees and made payments on behalf of the federal government.
The bank went away because state banks opposed it; they thought it gave too much power to national government.
1816 Second Bank of the United States
This bank failed because it didn't regulate state banks or charter any other bank.
State banks were issuing their own currency.
Civil War (printing currency)
Federal government didn't print paper currency until the Civil War.
1863 National Banking Act
This act was designed to create a national banking system, float federal war loans, and establish a national currency. Banks could have a state or federal charter (duel banking).
1913 Federal Reserve Act
This act intended to establish a form of economic stability through the introduction of the Central Bank (National Bank), which would be in charge of monetary policy, into the US.
1930's Great Depression (regarding bank)
During this disastrous time period, FDR declared a "bank holiday" where banks closed and were only allowed to reopen if they proved they were financially stable.
Glass-Steagall Banking Act
This act established the Federal Deposit Insurance Corporation or FDIC. The FDIC ensure that if a bank goes under, you still have your money.
In the 1970's, Congress relaxed restrictions on banks.
In 1982, Congress allowed the S&L banks to make high risk loans and investments. As a result, investments went bad, banks failed, Federal Government had to give investors their money back and obtained a debt of $200 billion, and the FDIC took over the S&L.
1999 Gramm-Leach-Bliley Act
This act allowed banks to have more control over banking, insurance, and securities. The cons were less competition, chance of forming a universal bank, and chance of leading to more sharing of information (reduction of privacy).