Sen. Elizabeth Warren, D-Mass., reintroduced Tuesday her 21st Century Glass-Steagall Act to rein in banks’ risky behaviors by reinstating certain Glass-Steagall Act protections that were repealed by the Gramm-Leach-Bliley Act.
The same day, a new poll conducted by Lake Research Partners found that voters still want tougher rules for Wall Street five years after the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed into law.
First introduced in the 113th Congress by Sens. Warren and John McCain, R-Ariz., the 21st Century Glass-Steagall Act would separate traditional banks that have savings and checking accounts and are insured by the Federal Deposit Insurance Corp. from “riskier financial institutions” that offer services such as investment banking, insurance, swaps dealing, and hedge fund and private equity activities.
The bill states that it would “clarify regulatory interpretations of banking law provisions that undermined the protections under the original Glass-Steagall” and would make “too-big-to-fail” institutions smaller and safer, minimizing the likelihood of a government bailout.
“Despite the progress we’ve made since 2008, the biggest banks continue to threaten our economy,” said Warren in a statement. “The biggest banks are collectively much larger than they were before the crisis, and they continue to engage in dangerous practices that could once again crash our economy.”
The 21st Century Glass-Steagall Act will “rebuild the wall between commercial and investment banking and make our financial system more stable and secure.”
McCain, who co-sponsored the bill again with Warren, noted in the statement that since core provisions of the Glass-Steagall Act were repealed in 1999, “shattering the wall dividing commercial banks and investment banks, a culture of dangerous greed and excessive risk-taking has taken root in the banking world.”
He added that “big Wall Street institutions should be free to engage in transactions with significant risk, but not with federally insured deposits.”
If enacted, the 21st Century Glass-Steagall Act would not end too-big-to-fail banks, McCain said, “but, it would rebuild the wall between commercial and investment banking that was in place for over 60 years, restore confidence in the system and reduce risk for the American taxpayer.”
Meanwhile, the telephone survey of 1,000 likely 2016 voters, conducted June 16-22 by Lake Research Partners on behalf of Americans for Financial Reform and the Center for Responsible Lending, found that 91% of voters polled agreed that it is important to regulate financial services and products to make sure they are fair for consumers, while four-fifths (79%) said Wall Street companies should be held accountable with tougher rules and enforcement for the practices that caused the financial crisis.
By nearly a 3:1 margin, voters want to see more, not less, oversight and regulation of financial companies, the report stated, with fewer than a quarter (23%) stating that tough regulations on Wall Street will hurt the U.S. economy.
Also, regardless of party affiliation, a large percentage of voters favor the central provisions of Dodd-Frank. After hearing a brief description of the law, nearly three-quarters of likely 2016 voters (73%) say they favor it, including 80% of Democrats, 72% of Independents, and 65% of Republicans, the poll found.
Voters polled also said they’d punish candidates who receive large amounts of campaign money from big banks, and reward candidates who favor tough rules on Wall Street, with 84% of likely 2016 voters stating they are concerned about the influence of Wall Street financial companies on elected officials, including nearly two-thirds (64%) who are very concerned.
Majorities across party lines said they would be less likely to vote for a candidate or member of Congress who received large sums of campaign money from big banks and financial companies, and a majority of Democrats (72%), Independents (54%) and Republicans (52%) said they would be more likely to vote for a candidate who favored protecting consumers by keeping tough rules on Wall Street to prevent irresponsible practices and abuses, the report found.
Voters polled also said they “consistently favor” the Consumer Financial Protection Bureau’s mission, with support for the CFPB’s purpose holding steady since last year at 75%, with 85% of Democrats, 74% of Independents and 66% of Republicans in favor.
— Read “DOL Shouldn’t Rubber-Stamp Waivers for Guilty Banks, Democrats Say” on ThinkAdvisor.