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SJM 8005

Addressing "de-risking" by financial institutions.

2023-2024 Regular Session Introduced by Bob Hasegawa and 1 co-sponsor

WA SJM 8005 urges Congress to restore Glass-Steagall-era separation of commercial and investment banking; a non-binding memorial signaling WA's stance, no state law change.

Filed with Secretary of State.
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Bill Summary · SJM 8005

Summary: Washington Senate Joint Memorial 8005 (SJM 8005)

A Washington state joint memorial urging Congress to reinstate the Glass-Steagall separation between commercial and investment banking. The measure is non-binding and serves as a formal expression of the Legislature’s position and a call for federal action.

Purpose and Intent

  • The memorial requests that Congress enact legislation restoring the separation of commercial and investment banking functions that existed under the Glass-Steagall Act (Banking Act of 1933).
  • It specifically references proposed federal measures such as H.R. 2714 (Return to Prudent Banking Act of 2023) and S. 881 (21st Century Glass-Steagall Act), or any equivalent legislation.
  • The rationale cited is to protect depositors, reduce taxpayer exposure to financial crises, and limit the use of depositor funds for speculative activities.

Key Provisions and Changes (as a memorial, not a bill)

  • The memorial itself does not create new state law or funding; it issues a formal request to Congress to reinstate Glass-Steagall-style protections.
  • It would prohibit commercial banks and bank holding companies from engaging in certain activities identified under Glass-Steagall’s framework, including:
    • Investing in stocks
    • Underwriting securities
    • Engaging in or underwriting derivative transactions (investing in or acting as guarantors)
  • The memorial stresses preventing taxpayer-funded bailouts by limiting the “too big to fail” dynamic that arose after the GLBA repeal.

Background and Context

  • Glass-Steagall Act (1933) separated commercial banking from investment banking, with strict restrictions on banks’ income sources.
  • Gramm-Leach-Bliley Act (1999) repealed much of Glass-Steagall, allowing broad financial consolidation.
  • Proponents argue reinstating Glass-Steagall protections could reduce systemic risk and taxpayer exposure; supporters of the idea include diverse policymakers and commentators over the years.

Affected Parties

  • Federal policymakers in Congress (the primary audience for the memorial).
  • U.S. commercial banks, investment banks, and bank holding companies (subject to potential future restriction if Congress acts).
  • Washington state residents and taxpayers via the Legislature’s express policy stance.

Procedural History and Status

  • Prefiled: December 23, 2024.
  • 2025: House rules actions and committee activity (Consumer Protection & Business): public hearing (March 19, 2025); executive action with a majority “do pass” (March 26, 2025); minority positions noted.
  • 2025-04-27: By resolution, returned to Senate Rules Committee for third reading.
  • This is a Joint Memorial (SJM 8005), a non-binding resolution expressing state policy and urging federal action.

Fiscal Notes

  • No appropriation; no fiscal note requested.

Potential Impact

  • As a non-binding memorial, it does not change state law but signals Washington State’s stance and aims to influence federal policy discussions on banking structure and consumer protection.
  • If Congress acts on similar proposals, it could pave the way for a formal return to Glass-Steagall-type separations and associated regulatory changes.

Compiled from official sources — confirm details with the bill’s official record.

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