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Bank of the United States
The Bank of the US received a charter from Congress and was signed by President Washington. This bank collected fees and made payments on behalf of the federal government in order to pay off debt from the Revolutionary War. The Bank went away because state governments opposed it. They thought that it gave too much power to the federal government.
Photo Source: http://www.ushistory.org/tour/first-bank.htm -
Second Bank of the United States
The Second Bank was established after financing problems during the War of 1812. The Second Bank faced resentment in several states who wanted to restrict the Bank's operations. However, McCulloch v. Maryland stated that the Constitution grants Congress the power to create a central bank. Eventuall, the Second Bank failed anyway because it didn't regulate state banks or charter any other bank.
Photo Source: https://en.wikipedia.org/wiki/Second_Bank_of_the_United_States -
Civil War-Printing Currency
The Civil War created a coinage shortage, so the first official paper currency of the United States was printed. The Confederate States of America actually released their first issue of paper money first in April of 1861. That same year, the US Congress also authorized the US State Treasury to issue paper money. This money was called Demand Notes and they came in $5, $10, and $20 increments.
Photo Source: http://www.antiquemoney.com/ten-dollar-bills-from-the-1860s/ -
The National Banking Act
The National Banking Act of 1863 was passed to help resolve the financial crisis during the beginning of the Civil War. This Act was enacted to create a national banking system and establish a national currency that would bring financial stability to the US and fund the war effort. Under the Act, banks could have a state or federal charter, called duel banking.
Photo Source: http://www.let.rug.nl/usa/essays/general/a-brief-history-of-central-banking/national-banking-acts-of-1863-and-1864.php -
Federal Reserve Act
The Federal Reserve Act established the Federal Reserve Banking System as the central bank of the United States. The goal in doing this was to provide the nation with a safer, more flexible, and more stable monetary and financial system. The law created the purposes, structure, and functions of the Federal Reserve System. Included in this was the authority of the Federal Reserve to issue Federal Notes or currency (the Dollar Bill).
Photo Source: https://federal.laws.com/federal-reserve-act -
Banking During the Great Depression
The Great Depression was a period severe economic crisis in America during the 1930s. In the early 30s, banks began failing at alarming rates. By 1933, banks in all 48 states had either closed or had placed restrictions on how much money depositors could withdraw. Therefore, FDS declared a "bank holiday" that closed all banks for a three-day period. Banks were only allowed to reopen if they proved they were still stable.
Photo Source: https://livinghistoryfarm.org/farminginthe30s/money_08.html -
Glass-Stegall Banking Act
The Glass-Stegall Banking Act was signed into law by FDR in June of 1933. It established the FDIC, or the Federal Deposit Insurance Corporation, whcih ensures that if a bank goes under, people would still have their money. This Act also effectively separated commercial banking from investment banking.
Photo Source: https://www.nytimes.com/2015/10/15/upshot/what-is-glass-steagall-the-82-year-old-banking-law-that-stirred-the-debate.html -
Banking in the 1970's
In the 1970s, Congress relaxes restrictions on banking. There were many acts passed during the 1970s to help stimulate the economy and to encourage banks to meet the credit needs of their communities. In 1975, Congress passed the Home Mortgage Disclosure Act, which encouraged banks and S&Ls to lend mortgage money to low-income areas.
Photo Source: http://www.legalbeagles.info/forums/showthread.php?22954-Banks-customer-rules-to-change -
Banking in 1982
In 1982, Congress allowed Savings and Loans (S&L) banks to make high risk loans and investments. The investments were not successful and the banks failed. Therefore, the federal government had to give investors their money back. Due to these events, the government debt totalled to $200 billion. After this, the FDIC took over the S&L.
Photo Source: https://www.fdic.gov/bank/analytical/firstfifty/chapter5.html -
Gramm-Leach-Bliley Act
The Gramm-Leach-Bliley Act allows banks to have more control over banking, insurance, and securities. The negative effect of less regulation was that it raised significant risks that these new financial institutions would have access to an incredivle amount of personal information, with no restrictions upon its use. To prevent this, the act included requirements to protect the personal data of individuals.
Photo Source: https://en.wikipedia.org/wiki/Gramm%E2%80%93Leach%E2%80%93Bliley_Act
