Warren, McCain introduce bill to bring back Glass-Steagall

Sens. Elizabeth WarrenElizabeth Ann WarrenOvernight Finance: Lawmakers grill Equifax chief over hack | Wells Fargo CEO defends bank's progress | Trump jokes Puerto Rico threw budget 'out of whack' | Mortgage tax fight tests industry clout Michelle Obama is exactly who the Democrats need to win big in 2020 Wells Fargo chief defends bank's progress in tense Senate hearing MORE (D-Mass.) and John McCainJohn Sidney McCainRubio asks Army to kick out West Point grad with pro-communist posts The VA's woes cannot be pinned on any singular administration Overnight Defense: Mattis offers support for Iran deal | McCain blocks nominees over Afghanistan strategy | Trump, Tillerson spilt raises new questions about N. Korea policy MORE (R-Ariz.) are reintroducing legislation to revive the Glass-Steagall Act, which would force big banks to split their investment and commercial banking practices.

Glass-Steagall was first passed in 1933 but repealed during the Clinton administration, leading many progressives to argue that it contributed to the 2008 financial collapse.

Warren and McCain, along with their cosponsors, Sens. Angus KingAngus Stanley KingSenate confirms No. 2 spot at HHS, days after Price resigns Overnight Defense: Mattis offers support for Iran deal | McCain blocks nominees over Afghanistan strategy | Trump, Tillerson spilt raises new questions about N. Korea policy Mattis: Staying in Iran deal is of US national security interest MORE (I-Maine) and Maria CantwellMaria Elaine CantwellUse tax reform to strengthen what’s working: The low-income housing tax credit Senate energy bill is misguided gift to Trump’s dirty fossil fuel agenda Help states solve their housing problems with the Affordable Housing Credit Improvement Act MORE (D-Wash.), said in a statement that the legislation would make big banks that are "too big to fail" smaller and safer and minimize the likelihood of a government bailout.

ADVERTISEMENT
The bill, which they first introduced in the last Congress, would separate traditional banking with checking and savings accounts from financial institutions that offer services such as investment banking, which are riskier.

"Despite the progress we've made since 2008, the biggest banks continue to threaten our economy," said Warren, an ardent Wall Street critic, 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."

McCain said the repeal of Glass-Steagall led to "a culture of dangerous greed and excessive risk-taking" in the banking industry.

"Big Wall Street institutions should be free to engage in transactions with significant risk, but not with federally insured deposits," McCain said in a statement.

Many of President Clinton's former advisers vehemently deny claims that repealing the law brought on the financial crisis, instead pointing to problems in the housing market and risky lending by banks.