Senate Banking, Housing and Urban Affairs Committee Through the Ages
The Senate creates the Banking and Currency Committee and chooses Sen. Robert Owen (D-Okla.) as its first chairman. Owen sponsors the Federal Reserve Act, which creates the Federal Reserve System. The Finance Committee previously held jurisdiction over banking and currency issues.
The committee approves the McFadden Act, which bars interstate banking and establishes states as the primary insurance regulators.
Massive bank failures during the Great Depression lead the committee to enact the Glass-Steagall Act, which establishes the Federal Deposit Insurance Corp. and mandates a separation between commercial and investment banking. The 1999 Gramm-Leach-Bliley Act repeals the latter provision.
The committee works to enact the first National Housing Act. The bill establishes the Federal Housing Administration and the Federal Savings and Loan Insurance Corp. with the goal of increasing home mortgage availability. Later reauthorizations extend federal aid to public housing (1937) and urban redevelopment (1949).
The Bank Holding Company Act is signed into law. The law requires Federal Reserve approval for the establishment of bank holding companies, prohibits the companies from owning nonbanking businesses and bars interstate holdings by the holding companies. Congress repeals the interstate banking ban in 1994 and modifies the prohibition on nonbanking holdings in 1999.
As part of President Lyndon Johnson’s “Great Society— agenda, Congress passes the Housing and Urban Development Act, establishing the Housing and Urban Development Department. The new department includes the Federal Housing Administration.
To reflect the committee’s jurisdiction over housing issues, Congress gives the panel its current name, the Banking, Housing and Urban Affairs Committee. Sen. John Sparkman (D-Ala.) continues to serve as chairman of the renamed committee.
The Housing and Community Development Act is signed into law. The bill establishes the Community Development Block Grant program.
The committee works to enact the Community Reinvestment Act into law. The legislation requires federally regulated banks to make loans in low- and moderate-income neighborhoods.
The panel approves legislation removing Depression-era restrictions on interest rate levels for deposits, resulting in the enactment of the Depository Institutions Deregulation and Monetary Control Act.
Chairman Jake Garn (R-Utah) works with his House counterpart, Rep. Fernand St. Germain (D-R.I.), to pass the Garn-St. Germain Act. The measure deregulates the thrift industry and is later blamed by many for the savings and loan crisis.
In response to the savings and loan crisis, the committee works to pass the Financial Institutions Reform, Recovery and Enforcement Act. FIRREA abolishes the Federal Savings and Loan Insurance Corp., establishes a new Office of Thrift Supervision and creates the Resolution Trust Corp. to dispose of the assets of failed savings and loan associations.
Chairman Donald Riegle (D-Mich.) works with Rep. Stephen Neal (D-N.C.) to craft the Riegle-Neal Interstate Banking and Branching Efficiency Act, which repeals the ban on interstate bank ownership.
Chairman Phil Gramm (R-Texas) works with House Banking and Financial Services Chairman Jim Leach (R-Iowa) and Commerce Chairman Thomas Bliley (R-Va.) to enact the Gramm-Leach-Bliley Act. This sweeping measures repeals the Glass-Steagall Act’s separation between commercial and investment banking and modifies the Bank Holding Company Act to allow bank holding companies to own insurance businesses.
Chairman Paul Sarbanes (D-Md.) works with his House counterpart, Financial Services Chairman Mike Oxley (R-Ohio), to enact the Sarbanes-Oxley Act. Drafted in response to the collapse of Enron, the legislation imposes new corporate governance standards for publicly traded companies.
The Emergency Economic Stabilization Act is signed into law. The bill establishes the $700 billion Troubled Asset Relief Program to assist troubled financial institutions in the wake of the late 2008 financial crisis. TARP is later expanded to assist nonfinancial companies, including General Motors Corp. and Chrysler.
Chairman Chris Dodd (D-Conn.) introduces comprehensive financial regulatory reform legislation in response to the 2008 financial crisis.