The Gramm-Leach-Bliley Act

[alskahawk]

 Sponsored by Phil Gramm(R-TX) Senate and James Leach (R-IA) House

"The Gramm-Leach-Bliley Act, also known as the Gramm-Leach-Bliley Financial Services Modernization Act, Pub. L. No. 106-102, 113 Stat. 1338 (November 12, 1999), is an Act of the United States Congress which repealed part of the Glass-Steagall Act, opening up competition among banks, securities companies and insurance companies. The Glass-Steagall Act prohibited a bank from offering investment, commercial banking, and insurance services."

Critics;
"Economist Robert Kuttner (among others) has criticized the repeal of the Glass-Steagall Act as contributing to the 2007 subprime mortgage financial crisis.[7] Economists Robert Ekelund and Mark Thornton have made similar criticisms, arguing that while "in a world regulated by a gold standard, 100% reserve banking, and no FDIC deposit insurance" the Financial Services Modernization Act would have made "perfect sense" as a legitimate act of deregulation, under the present fiat monetary system it "amounts to corporate welfare for financial institutions and a moral hazard that will make taxpayers pay dearly". [8]

 
 Senator Phil Gramm led the Senate Banking Committee which sponsored the Act; he later joined UBS Warburg, at the time the investment banking arm of the largest Swiss bank

 Note; This bill passed the Senate with votes going along party lines (54-44) and the House with majority (343-86) vote.   











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[rpm]

Phill Gramm was a Texas Republican. No wonder the plan went to ****. McCain will make him SecTres.

[bustr]

 just finished reading the whole bill. It was a compromise which gave the Dems support and strengthening of the Community Reinvestment Act while the Repubs got a loosening of the oversight rules for banking and investment processes.

Effectively the rules on oversight became what ever the Senate committee on Banking, Housing and Urban Affairs decided based on how the economy was going or how many minorities were not getting loans. The SCC and Fed would only realy take notice when the comittee gave marching orders or standard banking rules were broken or turned up in scheduled audits. It also has a provision for small state banks to restructure themselves as Federaly insured banks. Thus all the bailing out going on right now.

The bill gives a lot of wiggle room to turn a blind eye and not provide the same intensity of oversight by the Fed and SCC as did the Glass-Steagall act. No wonder the Dems didn't fillibuster it. They got what they wanted along with being able to vote no and look like a party united. Clinton got his strengthening of the Community Reinvestment Act to insure bad loans to minorities. Everybody got what they wanted on both sides of the ilse. The american taxpayer took a hot carl in the kester and never knew it happened until this year.

Yay Congress writing itself a law letting it secure bad loans with our money. There is a whole section in the bill on federal protection of a certain amount of bad structure with federal money. The language is very vauge and loose with wide room for interpritation. The unsecured loans came in towards the end as devices to give loans to poor or minorities. We got took my fellow americans....took without even flowers or dinner...just took.

And Clinton smiled all the way to being named america's first Black President.     

[alskahawk]

 Wiggle room is a good term for the way they did this bill(both parties). Another term "plausible deniability".

 The way I read this is that while it was primarily a Republican sponsored bill, there was widespread support in the House. The Senators voted along party lines for the most part. I remember when the Republicans pushed this bill through Congress. There was some bickering, but there was quite a bit of support for it on both sides of the aisle once the compromises were dished out.

 The banking lobby got what they paid for.

I would like to know how Biden and McCain voted. McCain (the Deregulator) probably voted for it.

[bj229r]

Went almost exactly by party lines http://www.govtrack.us/congress/vote.xpd?vote=s1999-105&sort=vote

Clinton or the Dems in senate could have stopped it as it was far shy of 60 votes, but......we have a bunch of lawyers on both sides who understand naught of macro-economics

[rabbidrabbit]

Ironically, those banks got more than they bargained for as most will struggle to survive as a result of their greed.

What we really need is to have certain regulations earmarked to need a super majority to override.  How many times in history has small and unforeseen changes resulted in severe damage down the line.  Its as if the congress never learns and simply tweaks this or that to placate some lobbyist and the whole population suffers a few years later as the birds come home to roost.

[Toad]

Ironically, those banks got more than they bargained for as most will struggle to survive as a result of their greed.

The taxpayers and the stockholders will be the only ones that suffer. The officer's of those banks will bail out with their golden parachutes and live happily ever after.

[rabbidrabbit]

Are you saying the shareholders are not getting wiped out?  Beyond a few highly paid execs who wisely bailed from the mess they created came to fruition most everyone saw strong growth followed by sudden death as trillions of dollars evaporated.