I 

114TH CONGRESS 

1ST SESSION H. R. 381 

To repeal certain provisions of the Gramm-Leach-Bliley Act and revive the 

separation between commercial banking and the securities business, in 

the manner provided in the Banking Act of 1933, the so-called ‘‘GlassSteagall Act’’, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

JANUARY 14, 2015 

Ms. KAPTUR (for herself, Mr. JONES, Mr. BLUMENAUER, Mr. CUMMINGS, Ms. 

EDDIE BERNICE JOHNSON of Texas, Mr. CAPUANO, Mr. LOWENTHAL, 

Mr. LYNCH, Mr. MCGOVERN, Ms. NORTON, Mr. RANGEL, Ms. SLAUGHTER, Mr. TONKO, Ms. TSONGAS, Mr. GARAMENDI, Mr. WELCH, and Mr. 

GENE GREEN of Texas) introduced the following bill; which was referred 

to the Committee on Financial Services 

A BILL 

To repeal certain provisions of the Gramm-Leach-Bliley Act 

and revive the separation between commercial banking 

and the securities business, in the manner provided in 

the Banking Act of 1933, the so-called ‘‘Glass-Steagall 

Act’’, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Return to Prudent 

5 Banking Act of 2015’’. 


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1 SEC. 2. GLASS-STEAGALL REVIVED. 

2 (a) WALL BETWEEN COMMERCIAL BANKS AND SE3 CURITIES ACTIVITIES REESTABLISHED.—Section 18 of 

4 the Federal Deposit Insurance Act (12 U.S.C. 1828) is 

5 amended by adding at the end the following new sub6 section: 

7 ‘‘(aa) LIMITATIONS ON SECURITY AFFILIATIONS.— 

8 ‘‘(1) PROHIBITION ON AFFILIATION BETWEEN

9 INSURED DEPOSITORY INSTITUTIONS AND INVEST10 MENT BANKS OR SECURITIES FIRMS.—An insured 

11 depository institution may not be or become an affil12 iate of any broker or dealer, any investment adviser, 

13 any investment company, or any other person en14 gaged principally in the issue, flotation, under15 writing, public sale, or distribution at wholesale or 

16 retail or through syndicate participation of stocks, 

17 bonds, debentures, notes, or other securities. 

18 ‘‘(2) PROHIBITION ON OFFICERS, DIRECTORS

19 AND EMPLOYEES OF SECURITIES FIRMS SERVICE ON

20 BOARDS OF DEPOSITORY INSTITUTIONS.— 

21 ‘‘(A) IN GENERAL.—An individual who is 

22 an officer, director, partner, or employee of any 

23 broker or dealer, any investment adviser, any 

24 investment company, or any other person en25 gaged principally in the issue, flotation, under26 writing, public sale, or distribution at wholesale 


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1 or retail or through syndicate participation of 

2 stocks, bonds, debentures, notes, or other secu3 rities may not serve at the same time as an of4 ficer, director, employee, or other institution-af5 filiated party of any insured depository institu6 tion. 

7 ‘‘(B) EXCEPTION.—Subparagraph (A) 

8 shall not apply with respect to service by any 

9 individual which is otherwise prohibited under 

10 such subparagraph if the appropriate Federal 

11 banking agency determines, by regulation with 

12 respect to a limited number of cases, that serv13 ice by such individual as an officer, director, 

14 employee, or other institution-affiliated party of 

15 any insured depository institution would not un16 duly influence the investment policies of the de17 pository institution or the advice the institution 

18 provides to customers. 

19 ‘‘(C) TERMINATION OF SERVICE.—Subject 

20 to a determination under subparagraph (B), 

21 any individual described in subparagraph (A) 

22 who, as of the date of the enactment of the Re23 turn to Prudent Banking Act of 2013, is serv24 ing as an officer, director, employee, or other 

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1 itory institution shall terminate such service as 

2 soon as practicable after such date of enact3 ment and no later than the end of the 60-day 

4 period beginning on such date. 

5 ‘‘(3) TERMINATION OF EXISTING AFFILI6 ATION.— 

7 ‘‘(A) ORDERLY WIND-DOWN OF EXISTING

8 AFFILIATION.—Any affiliation of an insured de9 pository institution with any broker or dealer, 

10 any investment adviser, any investment com11 pany, or any other person, as of the date of the 

12 enactment of the Return to Prudent Banking 

13 Act of 2013, which is prohibited under para14 graph (1) shall be terminated as soon as prac15 ticable and in any event no later than the end 

16 of the 2-year period beginning on such date of 

17 enactment. 

18 ‘‘(B) EARLY TERMINATION.—The appro19 priate Federal banking agency, after oppor20 tunity for hearing, may terminate, at any time, 

21 the authority conferred by the preceding sub22 paragraph to continue any affiliation subject to 

23 such subparagraph until the end of the period 

24 referred to in such subparagraph if the agency 

25 determines, having due regard for the purposes 


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1 of this subsection and the Return to Prudent 

2 Banking Act of 2013, that such action is nec3 essary to prevent undue concentration of re4 sources, decreased or unfair competition, con5 flicts of interest, or unsound banking practices 

6 and is in the public interest. 

7 ‘‘(C) EXTENSION.—Subject to a deter8 mination under subparagraph (B), an appro9 priate Federal banking agency may extend the 

10 2-year period referred to in subparagraph (A) 

11 from time to time as to any particular insured 

12 depository institution for not more than 6 

13 months at a time, if, in the judgment of the 

14 agency, such an extension would not be detri15 mental to the public interest, but no such exten16 sions shall in the aggregate exceed 1 year. 

17 ‘‘(4) DEFINITIONS.—For purposes of this sub18 section, the terms ‘broker’ and ‘dealer’ have the 

19 same meanings as in section 3(a) of the Securities 

20 Exchange Act of 1934 and the terms ‘investment 

21 adviser’ and ‘investment company’ have the meaning 

22 given such terms under the Investment Advisers Act 

23 of 1940 and the Investment Company Act of 1940, 

24 respectively.’’. 


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1 (b) PROHIBITION ON BANKING ACTIVITIES BY SECU2 RITIES FIRMS CLARIFIED.—Section 21 of the Banking 

3 Act of 1933 (12 U.S.C. 378) is amended by adding at 

4 the end the following new subsection: 

5 ‘‘(c) BUSINESS OF RECEIVING DEPOSITS.—For pur6 poses of this section, the term ‘business of receiving depos7 its’ includes the establishment and maintenance of any 

8 transaction account (as defined in section 19(b)(1)(C) of 

9 the Federal Reserve Act).’’. 

10 (c) CONTINUED APPLICABILITY OF ICI VS. CAMP.— 

11 (1) IN GENERAL.—The Congress ratifies the in12 terpretation of the paragraph designated the ‘‘Sev13 enth’’ of section 5136 of the Revised Statutes of the 

14 United States (12 U.S.C. 24, as amended by section 

15 16 of the Banking Act of 1933 and subsequent 

16 amendments) and section 21 of the Banking Act of 

17 1933 (12 U.S.C. 378) by the Supreme Court of the 

18 United States in the case of Investment Company 

19 Institute v. Camp (401 U.S. 617 et seq. (1971)) 

20 with regard to the permissible activities of banks 

21 and securities firms, except to the extent expressly 

22 prescribed otherwise by this section. 

23 (2) APPLICABILITY OF REASONING.—The rea24 soning of the Supreme Court of the United States 

25 in the case referred to in paragraph (1) with respect 


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1 to sections 20 and 32 of the Banking Act of 1933 

2 (as in effect prior to the date of the enactment of 

3 the Gramm-Leach-Bliley Act) shall continue to apply 

4 to subsection (aa) of section 18 of the Federal De5 posit Insurance Act (as added by subsection (a) of 

6 this section) except to the extent the scope and ap7 plication of such subsection as enacted exceed the 

8 scope and application of such sections 20 and 32. 

9 (3) LIMITATION ON AGENCY INTERPRETATION

10 OR JUDICIAL CONSTRUCTION.—No appropriate Fed11 eral banking agency, by regulation, order, interpre12 tation, or other action, and no court within the 

13 United States may construe the paragraph des14 ignated the ‘‘Seventh’’ of section 5136 of the Re15 vised Statutes of the United States (12 U.S.C. 24, 

16 as amended by section 16 of the Banking Act of 

17 1933 and subsequent amendments), section 21 of 

18 the Banking Act of 1933, or section 18(aa) of the 

19 Federal Deposit Insurance Act more narrowly than 

20 the reasoning of the Supreme Court of the United 

21 States in the case of Investment Company Institute 

22 v. Camp (401 U.S. 617 et seq. (1971)) as to the 

23 construction and the purposes of such provisions. 


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1 SEC. 3. REPEAL OF GRAMM-LEACH-BLILEY ACT PROVI2 SIONS. 

3 (a) FINANCIAL HOLDING COMPANY.— 

4 (1) IN GENERAL.—Section 4 of the Bank Hold5 ing Company Act of 1956 (12 U.S.C. 1843) is 

6 amended by striking subsections (k), (l), (m), (n), 

7 and (o). 

8 (2) TRANSITION.— 

9 (A) ORDERLY WIND-DOWN OF EXISTING

10 AFFILIATION.—In the case of a bank holding 

11 company which, pursuant to the amendments 

12 made by paragraph (1), is no longer authorized 

13 to control or be affiliated with any entity that 

14 was permissible for a financial holding com15 pany, any affiliation by the bank holding com16 pany which is not permitted for a bank holding 

17 company shall be terminated as soon as prac18 ticable and in any event no later than the end 

19 of the 2-year period beginning on such date of 

20 enactment. 

21 (B) EARLY TERMINATION.—The Board of 

22 Governors of the Federal Reserve System, after 

23 opportunity for hearing, may terminate, at any 

24 time, the authority conferred by the preceding 

25 subparagraph to continue any affiliation subject 

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1 riod referred to in such subparagraph if the 

2 Board determines, having due regard to the 

3 purposes of this Act, that such action is nec4 essary to prevent undue concentration of re5 sources, decreased or unfair competition, con6 flicts of interest, or unsound banking practices, 

7 and is in the public interest. 

8 (C) EXTENSION.—Subject to a determina9 tion under subparagraph (B), the Board of 

10 Governors of the Federal Reserve System may 

11 extend the 2-year period referred to in subpara12 graph (A) above from time to time as to any 

13 particular bank holding company for not more 

14 than 6 months at a time, if, in the judgment of 

15 the Board, such an extension would not be det16 rimental to the public interest, but no such ex17 tensions shall in the aggregate exceed 1 year. 

18 (3) TECHNICAL AND CONFORMING AMEND19 MENTS.— 

20 (A) Section 2 of the Bank Holding Com21 pany Act of 1956 (12 U.S.C. 1841) is amended 

22 by striking subsection (p). 

23 (B) Section 5(c) of the Bank Holding 

24 Company Act of 1956 (12 U.S.C. 1844(c)) is 

25 amended— 


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1 (i) by striking paragraphs (3) and (4); 

2 and 

3 (ii) by redesignating paragraph (5) as 

4 paragraph (3). 

5 (C) Section 5 of the Bank Holding Com6 pany Act of 1956 (12 U.S.C. 1844) is amended 

7 by striking subsection (g). 

8 (D) The Federal Deposit Insurance Act 

9 (12 U.S.C. 1811 et seq.) is amended by striking 

10 section 45. 

11 (E) Subtitle B of title I of the Gramm12 Leach-Bliley Act is amended by striking section 

13 114 (12 U.S.C. 1828a) and section 115 (12 

14 U.S.C. 1820a). 

15 (b) FINANCIAL SUBSIDIARIES REPEALED.— 

16 (1) IN GENERAL.—Section 5136A of the Re17 vised Statutes of the United States (12 U.S.C. 24a) 

18 is amended to read as follows: 

19 ‘‘SEC. 5136A. [REPEALED].’’. 

20 (2) TRANSITION.— 

21 (A) ORDERLY WIND-DOWN OF EXISTING

22 AFFILIATION.—In the case of a national bank 

23 which, pursuant to the amendments made by 

24 paragraph (1), is no longer authorized to con25 trol or be affiliated with a financial subsidiary 


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1 as of the date of the enactment of this Act, 

2 such affiliation shall be terminated as soon as 

3 practicable and in any event no later than the 

4 end of the 2-year period beginning on such date 

5 of enactment. 

6 (B) EARLY TERMINATION.—The Comp7 troller of the Currency, after opportunity for 

8 hearing, may terminate, at any time, the au9 thority conferred by the preceding subpara10 graph to continue any affiliation subject to such 

11 subparagraph until the end of the period re12 ferred to in such subparagraph if the Comp13 troller determines, having due regard for the 

14 purposes of this Act, that such action is nec15 essary to prevent undue concentration of re16 sources, decreased or unfair competition, con17 flicts of interest, or unsound banking practices 

18 and is in the public interest. 

19 (C) EXTENSION.—Subject to a determina20 tion under subparagraph (B), the Comptroller 

21 of the Currency may extend the 2-year period 

22 referred to in subparagraph (A) above from 

23 time to time as to any particular national bank 

24 for not more than 6 months at a time, if, in the 

25 judgment of the Comptroller, such an extension 


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1 would not be detrimental to the public interest, 

2 but no such extensions shall in the aggregate 

3 exceed 1 year. 

4 (3) TECHNICAL AND CONFORMING AMEND5 MENT.— 

6 (A) The 20th undesignated paragraph of 

7 section 9 of the Federal Reserve Act (12 U.S.C. 

8 335) is amended by striking the last sentence. 

9 (B) The Federal Deposit Insurance Act is 

10 amended by striking section 46 (12 U.S.C. 

11 1831w). 

12 (4) CLERICAL AMENDMENT.—The table of sec13 tions for chapter one of title LXII of the Revised 

14 Statutes of the United States is amended by striking 

15 the item relating to section 5136A. 

16 (c) DEFINITION OF BROKER.—Section 3(a)(4)(B) of 

17 the Securities Exchange Act of 1934 (15 U.S.C. 

18 78c(a)(4)(B)) is amended— 

19 (1) by striking clauses (i), (iii), (v), (vii), (x), 

20 and (xi); and 

21 (2) by redesignating clauses (ii), (iv), (vi), (viii), 

22 and (ix) as clauses (i), (ii), (iii), (iv), and (v), respec23 tively. 


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1 (d) DEFINITION OF DEALER.—Section 3(a)(5)(C) of 

2 the Securities Exchange Act of 1934 (15 U.S.C. 

3 78c(a)(5)(C)) is amended— 

4 (1) by striking clauses (i) and (iii); and 

5 (2) by redesignating clauses (ii) and (iv) as 

6 clauses (i) and (ii), respectively. 

7 (e) DEFINITION OF IDENTIFIED BANKING PROD8 UCT.—Subsection (a) of section 206 of the Gramm-Leach9 Bliley Act (15 U.S.C. 78c note) is amended— 

10 (1) by inserting ‘‘and’’ after the semicolon at 

11 the end of paragraph (4); 

12 (2) in paragraph (5)(B)(ii), by striking ‘‘; or’’ 

13 and inserting a period; and 

14 (3) by striking paragraph (6) and all that fol15 lows through the end of such subsection. 

16 (f) DEFINITION OF ACTIVITIES CLOSELY RELATED

17 TO BANKING.— 

18 (1) IN GENERAL.—Section 4(c)(8) of the Bank 

19 Holding Company Act of 1956 (12 U.S.C. 

20 1843(c)(8)) is amended by striking ‘‘the day before 

21 the date of the enactment of the Gramm-Leach-Bli22 ley Act’’ and inserting ‘‘January 1, 1970’’. 

23 (2) PROVISION ALLOWING FOR EXCEPTIONS

24 AFTER REPORT TO THE CONGRESS.—Subsection (j) 

25 of section 4 of the Bank Holding Company Act of 


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1 1956 (12 U.S.C. 1843(j)) is amended to read as fol2 lows: 

3 ‘‘(j) APPROVAL FOR CERTAIN POST-1970 SUB4 SECTION (c)(8) ACTIVITIES.— 

5 ‘‘(1) IN GENERAL.—Notwithstanding the limita6 tion of the January 1, 1970, approval deadline in 

7 subsection (c)(8), the Board may determine an activ8 ity to be so closely related to banking as to be a 

9 proper incident thereto for purposes of such sub10 section, subject to the requirements of this sub11 section and such terms and conditions as the Board 

12 may require. 

13 ‘‘(2) GENERAL STANDARDS.—In making any 

14 determination under paragraph (1), the Board shall 

15 consider whether performance of the activity by a 

16 bank holding company or a subsidiary of such com17 pany can reasonably be expected to result in a viola18 tion of section 18(aa) of the Federal Deposit Insur19 ance Act, section 21 of the Banking Act of 1933, or 

20 the spirit of section 2(c) of the Return to Prudent 

21 Banking Act of 2013, and other possible adverse ef22 fects, such as undue concentration of resources, de23 creased or unfair competition, conflicts of interests, 

24 or unsound banking practices. 


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1 ‘‘(3) REPORT AND WAIT.—No determination of 

2 the Board under paragraph (1) may take effect be3 fore the end of the 180-day period beginning on the 

4 date by which notice of the determination has been 

5 submitted to both Houses of the Congress together 

6 with a detailed explanation of the activities to which 

7 the determination relates and the basis for the de8 termination, unless before the end of such period, 

9 such activities have been approved by an Act of Con10 gress.’’. 

11 (g) REPEAL OF PROVISION RELATING TO FOREIGN

12 BANKS FILING AS FINANCIAL HOLDING COMPANIES.— 

13 Section 8(c) of the International Banking Act of 1978 (12 

14 U.S.C. 3106(c)) is amended by striking paragraph (3). 

15 SEC. 4. REPORTS TO THE CONGRESS. 

16 (a) REPORTS REQUIRED.—Each time the Board of 

17 Governors of the Federal Reserve System, the Comptroller 

18 of the Currency, or another appropriate Federal banking 

19 agency makes a determination or an extension under sub20 paragraph (B) or (C) of paragraph (2) or (3) of section 

21 18(aa) of the Federal Deposit Insurance Act (as added 

22 by section 2(a)) or subparagraph (B) or (C) of subsection 

23 (a)(2) or (b)(2) of section 3, as the case may be, the 

24 Board, Comptroller, or agency shall promptly submit a re25 port of such determination or extension to the Congress. 


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1 (b) CONTENTS.—Each report submitted to the Con2 gress under subsection (a) shall contain a detailed descrip3 tion of the basis for the determination or extension. 

Æ 


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