The most important laws that have affected the banking
industry in the United States are listed below.
The Main Library of the FDIC, located at the FDIC offices in
Washington, D.C., has legislative histories of these laws. These
legislative histories help to provide a better understanding of
lawmakers' intent for the purpose and scope of the laws. The public can
make an appointment to use these materials by contacting the FDIC Library.
- National Bank Act of 1864 (Chapter 106, 13 STAT.
99).
Established a national banking system and the chartering of
nationalbbanks.
- Federal Reserve Act of 1913 (P.L. 63-43, 38 STAT. 251, 12
USC 221).
Established the Federal Reserve System as the central
banking system of the U.S.
- To Amend the National Banking Laws and the Federal Reserve
Act (P.L. 69-639, 44 STAT. 1224).
Also known as The McFadden
Act of 1927. Prohibited interstate banking.
- Banking Act of 1933 (P.L. 73-66, 48 STAT. 162).
Also
known as the Glass-Steagall Act. Established the FDIC as a temporary
agency. Separated commercial banking from investment banking,
establishing them as separate lines of commerce.
- Banking Act of 1935 (P.L. 74-305, 49 STAT.
684).
Established the FDIC as a permanent agency of the government.
- Federal Deposit Insurance Act of 1950 (P.L. 81-797, 64
STAT. 873).
Revised and consolidated earlier FDIC legislation into
one Act. Embodied the basic authority for the operation of the FDIC.
- Bank Holding Company Act of 1956 (P.L. 84-511, 70 STAT.
133).
Required Federal Reserve Board approval for the establishment
of a bank holding company. Prohibited bank holding companies
headquartered in one state from acquiring a bank in another state.
- International Banking Act of 1978 (P.L. 95-369, 92 STAT.
607).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Brought foreign banks within the federal
regulatory framework. Required deposit insurance for branches of
foreign banks engaged in retail deposit taking in the U.S.
- Financial Institutions Regulatory and Interest Rate Control Act
of 1978 (P.L. 95-630, 92 STAT. 3641).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Also known as FIRIRCA. Created the Federal
Financial Institutions Examination Council. Established limits and
reporting requirements for bank insider transactions. Created major
statutory provisions regarding electronic fund transfers.
- Depository Institutions Deregulation and Monetary Control Act
of 1980 (P.L. 96-221, 94 STAT. 132).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Also known as DIDMCA. Established "NOW
Accounts." Began the phase-out of interest rate ceilings on deposits.
Established the Depository Institutions Deregulation Committee.
Granted new powers to thrift institutions. Raised the deposit
insurance ceiling to $100,000.
- Depository Institutions Act of 1982 (P.L. 97-320, 96 STAT.
1469).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Also known as Garn-St Germain. Expanded FDIC
powers to assist troubled banks. Established the Net Worth Certificate
program. Expanded the powers of thrift institutions.
- Competitive Equality Banking Act of 1987 (P.L. 100-86, 101
STAT. 552).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Also known as CEBA. Established new standards
for expedited funds availability. Recapitalized the Federal Savings
& Loan Insurance Company (FSLIC). Expanded FDIC authority for open
bank assistance transactions, including bridge banks.
- Financial Institutions Reform, Recovery, and Enforcement Act of
1989 (P.L. 101-73, 103 STAT. 183).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Also known as FIRREA. FIRREA's purpose was to
restore the public's confidence in the savings and loan industry.
FIRREA abolished the Federal Savings & Loan Insurance Corporation
(FSLIC), and the FDIC was given the responsibility of insuring the
deposits of thrift institutions in its place.
The FDIC insurance fund created to cover thrifts was named the
Savings Association Insurance Fund (SAIF), while the fund covering
banks was called the Bank Insurance Fund (BIF).
FIRREA also abolished the Federal Home Loan Bank Board. Two new
agencies, the Federal Housing Finance Board (FHFB) and the Office of
Thrift Supervision (OTS), were created to replace it.
Finally, FIRREA created the Resolution Trust Corporation (RTC) as a
temporary agency of the government. The RTC was given the
responsibility of managing and disposing of the assets of failed
institutions. An Oversight Board was created to provide supervisory
authority over the policies of the RTC, and the Resolution Funding
Corporation (RFC) was created to provide funding for RTC operations.
- Crime Control Act of 1990 (P.L. 101-647, 104 STAT.
4789).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Title XXV of the Crime Control Act, known as the
Comprehensive Thrift and Bank Fraud Prosecution and Taxpayer Recovery
Act of 1990, greatly expanded the authority of Federal regulators to
combat financial fraud.
This act prohibited undercapitalized banks from making golden
parachute and other indemnification payments to institution-affiliated
parties. It also increased penalties and prison time for those
convicted of bank crimes, increased the powers and authority of the
FDIC to take enforcement actions against institutions operating in an
unsafe or unsound manner, and gave regulators new procedural powers to
recover assets improperly diverted from financial institutions.
- Federal Deposit Insurance Corporation Improvement Act of
1991 (P.L. 102-242, 105 STAT. 2236).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Also known as FDICIA. FDICIA greatly increased
the powers and authority of the FDIC. Major provisions recapitalized
the Bank Insurance Fund and allowed the FDIC to strengthen the fund by
borrowing from the Treasury.
The act mandated a least-cost resolution method and prompt
resolution approach to problem and failing banks and ordered the
creation of a risk-based deposit insurance assessment scheme. Brokered
deposits and the solicitation of deposits were restricted, as were the
non-bank activities of insured state banks. FDICIA created new
supervisory and regulatory examination standards and put forth new
capital requirements for banks. It also expanded prohibitions against
insider activities and created new Truth in Savings provisions.
- Housing and Community Development Act of 1992 (P.L.
102-550, 106 STAT. 3672).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Established regulatory structure for
government-sponsored enterprises (GSEs), combated money laundering,
and provided regulatory relief to financial institutions.
- RTC Completion Act (P.L. 103-204, 107 STAT. 2369).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Requires the RTC to adopt a series of management
reforms and to implement provisions designed to improve the agency's
record in providing business opportunities to minorities and women
when issuing RTC contracts or selling assets. Expands the existing
affordable housing programs of the RTC and the FDIC by broadening the
potential affordable housing stock of the two agencies.
Increases the statute of limitations on RTC civil lawsuits from
three years to five, or to the period provided in state law, whichever
is longer. In cases in which the statute of limitations has expired,
claims can be revived for fraud and intentional misconduct resulting
in unjust enrichment or substantial loss to the thrift. Provides final
funding for the RTC and establishes a transition plan for transfer of
RTC resources to the FDIC. The RTC's sunset date is set at Dec. 31,
1995, at which time the FDIC will assume its conservatorship and
receivership functions.
- Riegle Community Development and Regulatory Improvement Act of
1994 (P.L. 103-325, 108 STAT. 2160).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Established a Community Development Financial
Institutions Fund, a wholly owned government corporation that would
provide financial and technical assistance to CDFIs.
Contains several provisions aimed at curbing the practice of
"reverse redlining" in which non-bank lenders target low and moderate
income homeowners, minorities and the elderly for home equity loans on
abusive terms. Relaxes capital requirements and other regulations to
encourage the private sector secondary market for small business
loans.
Contains more than 50 provisions to reduce bank regulatory burden
and paperwork requirements. Requires the Treasury Dept. to develop
ways to substantially reduce the number of currency transactions filed
by financial institutions. Contains provisions aimed at shoring up the
National Flood Insurance Program.
- Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 (P.L. 103-328, 108 STAT. 2338).
Available from Library of
Congress Thomas Website. Under Legislation, select Public
Laws, then select the number of the Congress and find the Law by the
P.L. number.
Permits adequately capitalized and managed bank
holding companies to acquire banks in any state one year after
enactment. Concentration limits apply and CRA evaluations by the
Federal Reserve are required before acquisitions are approved.
Beginning June 1, 1997, allows interstate mergers between adequately
capitalized and managed banks, subject to concentration limits, state
laws and CRA evaluations. Extends the statute of limitations to permit
the FDIC and RTC to revive lawsuits that had expired under state
statutes of limitations.
- Economic Growth and Regulatory Paperwork Reduction Act of
1996 (P.L. 104-208, 110 STAT. 3009).
(pdf
version from Government Printing Office.)
Modified
financial institution regulations, including regulations impeding the
flow of credit from lending institutions to businesses and consumers.
Amended the Truth in Lending Act and the Real Estate Settlement
Procedures Act of 1974 to streamline the mortgage lending process.
Amended the FDIA to eliminate or revise various application,
notice, and recordkeeping requirements to reduce regulatory burden and
the cost of credit. Amended the Fair Credit Reporting Act to
strengthen consumer protections relating to credit reporting agency
practices.
Established consumer protections for potential clients of consumer
repair services. Clarified lender liability and federal agency
liability issues under the CERCLA. Directed FDIC to impose a special
assessment on depository institutions to recapitalize the SAIF,
aligned SAIF assessment rates.
- Gramm-Leach Bliley Act of 1999 (P.L. 106-102, 113 STAT
1338)
(pdf
version from Government Printing Office.)
Repeals last
vestiges of the Glass Steagall Act of 1933. Modifies portions of the
Bank Holding Company Act to allow affiliations between banks and
insurance underwriters. While preserving authority of states to
regulate insurance, the act prohibits state actions that have the
effect of preventing bank-affiliated firms from selling insurance on
an equal basis with other insurance agents. Law creates a new
financial holding company under section 4 of the BHCA, authorized to
engage in: underwriting and selling insurance and securities,
conducting both commercial and merchant banking, investing in and
developing real estate and other "complimentary activities." There are
limits on the kinds of non-financial activities these new entities may
engage in.
Allows national banks to underwrite municipal bonds.
Restricts the disclosure of nonpublic customer information by
financial institutions. All financial institutions must provide
customers the opportunity to "opt-out" of the sharing of the
customers' nonpublic information with unaffiliated third parties. The
Act imposes criminal penalties on anyone who obtains customer
information from a financial institution under false pretenses.
Amends the Community Reinvestment Act to require that financial
holding companies can not be formed before their insured depository
institutions receive and maintain a satisfactory CRA rating. Also
requires public disclosure of bank-community CRA-related agreements.
Grants some regulatory relief to small institutions in the shape of
reducing the frequency of their CRA examinations if they have received
outstanding or satisfactory ratings. Prohibits affiliations and
acquisitions between commercial firms and unitary thrift institutions.
Makes significant changes in the operation of the Federal Home Loan
Bank System, easing membership requirements and loosening restrictions
on the use of FHLB funds.
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