Requesting that Congress enact legislation that would reinstate the separation of commercial and investment banking functions that were in effect under the Glass-Steagall act.

2025-2026 Regular Session Introduced by Rob Chase and 4 co-sponsors

Washington urges Congress to restore Glass-Steagall: separate commercial from investment banking and bar banks from stocks, underwriting, or derivative guarantees.

First reading, referred to Consumer Protection & Business.

Purpose and Intent

HJM 4006 is a Joint Memorial from the Washington Legislature requesting that the U.S. Congress reinstate the separation of commercial and investment banking functions, as they existed under the Glass-Steagall Act of 1933.

The memorial explicitly urges Congress to enact H.R. 2714 (Return to Prudence Banking Act of 2023) or S. 881 (21st Century Glass-Steagall Act), or any comparable legislation, to prohibit commercial banks and bank holding companies from:

investing in stocks,
underwriting securities, and
investing in or acting as guarantors for derivative transactions.

Background and Rationale (as stated in the memorial)

The Glass-Steagall Act historically protected the public interest by separating commercial banking, investment banking, insurance, and securities activities.

The 1999 repeal (via subsequent legislation) is presented in the memorial as contributing to a major financial crisis and widespread economic hardship, including foreclosures and job losses.

The memorial notes prior federal efforts to restore Glass-Steagall protections (e.g., S. 881 in 2017 and H.R. 2714 in 2023) and cites broad-sounding national support from political platforms, labor organizations, and several economists and media outlets cited in the text.

The memorial frames the issue as a taxpayer-protection matter, aiming to prevent future bailouts of large financial institutions.

Key Provisions and Provisions to Watch

The memorial’s substantive demand is a call for Congress to enact:

The complete separation of commercial banking from securities activities, and
Prohibitions on:
commercial banks and bank holding companies investing in stocks,
underwriting securities,
investing in or guaranteeing derivative transactions.

It references and supports specific federal bills (H.R. 2714 and S. 881) as vehicles to achieve this separation.

Who/What Would Be Affected

A successful federal act modeled on Glass-Steagall would affect:

Commercial banks and bank holding companies operating in the United States.
The scope of permissible activities for those institutions (e.g., no stock investments, no securities underwriting, no derivative guarantees).

As a state memorial, it does not directly change state law or create state-level banking rules; its impact is aspirational and political, aiming to influence federal policy.

Procedural and Timeline Details

Status: First reading, referred to the House Committee on Consumer Protection & Business (2025 Regular Session).

Introduced: February 24, 2025.

Next steps (typical for a memorial): committee consideration could lead to a position statement or transmission to federal officials; as a memorial, it formally expresses the Legislature’s position rather than creating enforceable state law.

Potential Impacts to Note

Legal effect: None directly in Washington state law; no state budget or regulatory mandate results from a memorial.

Policy impact: Signals state-level support for federal Glass-Steagall-style reform, which could influence national discussions and congressional action.

Economic implications: The memorial frames potential benefits as reducing taxpayer risk and preventing bailouts, though supporters and opponents debate the balance between financial stability and market flexibility.

If you’d like, I can add a side-by-side comparison with the current Glass-Steagall framework and Gramm-Leach-Bliley provisions to provide a quick reference for readers.

Bill