Citing the Trump administration’s stated support for a new Glass-Steagall bill, a group of senators including Democrat Elizabeth Warren and Republican John McCain introduced legislation Thursday to bring back and expand the Depression-era banking regulation.
The bipartisan legislation, also authored by Sens. Maria Cantwell, D-Wash., and Angus King, I-Maine, would separate commercial from investment banks. The bill would mean that banks with deposits insured by the government could not be in the business of underwriting securities, running hedge funds or providing insurance.
Such a measure would go far beyond the banking restrictions put in place by the 2010 Dodd-Frank law signed by former President Barack Obama. Yet President Trump campaigned on reinstating the legislation, and his advisers have maintained that he still favors it. Most recently, his economic adviser Gary Cohn reportedly told lawmakers that he backs a new Glass-Steagall, an endorsement that drew attention because Cohn previously was the president of Goldman Sachs, a megabank that would be broken up by such a provision.
“The 21st century Glass-Steagall Act will re-establish the wall between commercial and investment banking and make our financial system more stable and secure,” said Warren, a Massachusetts Democrat and noted critic of Wall Street. “Reinstating Glass-Steagall has broad bipartisan support, and it’s time to get it done.”
The four senators have introduced the legislation in past Congresses, but it has gone nowhere.
In the 2016 elections, however, Glass-Steagall supporters took encouragement from the fact that both parties’ platforms expressed support for a wall between commercial and investment banking.
In his campaign for the Democratic nomination for president, Sen. Bernie Sanders also ran on reinstating Glass-Steagall, one of the planks that placed him to the left of Hillary Clinton.
