WASHINGTON — Sens. Maria Cantwell, D-Wa., and John McCain introduced a bill Wednesday that would repeal the Gramm-Leach-Bliley Act of 1999 by restoring the walls between the banking, securities and insurance industries.
Under the Banking Integrity Act of 2009, commercial banks would be prohibited from affiliating with investment banks or vice versa. The bill would also ban commercial banks from engaging in all insurance activities. The legislation would force banks to divest their commercial and investment banking operations within one year of enactment.
"American can't afford another financial crisis," said Cantwell in a press release. "With big banks using depositor money to gamble on Wall Street, it's only a matter of time... We must return stability, security and confidence to commercial banking for the American public. The first step is this bill."
McCain added that the bill would help ensure we "never stick the American taxpayer with another $700 billion — or even larger — tab to bailout the financial industry."
"This country would be better served if we limit the activities of these financial institutions," McCain said.
The bill is an attempt to reinstate the Glass-Steagall Act of 1933, which first created walls between the banking, securities and insurance industries. The Gramm-Leach-Bliley Act repealed the Depression-era law.
Ironically, McCain was aided during his failed presidential bid last year by one of the principal architects of the financial reform law, former Sen. Phil Gramm of Texas.