II 

113TH CONGRESS 

1ST SESSION S. 985 

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 SENATE OF THE UNITED STATES 

MAY 16, 2013 

Mr. HARKIN introduced the following bill; which was read twice and referred 

to the Committee on Banking, Housing, and Urban Affairs 

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 2013’’. 


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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), as 

5 amended by section 615(a) of the Dodd-Frank Wall Street 

6 Reform and Consumer Protection Act, is amended by add7 ing at the end the following new subsection: 

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

9 ‘‘(1) PROHIBITION ON AFFILIATION BETWEEN

10 INSURED DEPOSITORY INSTITUTIONS AND INVEST11 MENT BANKS OR SECURITIES FIRMS.—An insured 

12 depository institution may not be or become an affil13 iate of any broker or dealer, any investment adviser, 

14 any investment company, or any other person en15 gaged principally in the issue, flotation, under16 writing, public sale, or distribution at wholesale or 

17 retail or through syndicate participation of stocks, 

18 bonds, debentures, notes, or other securities. 

19 ‘‘(2) PROHIBITION ON OFFICERS, DIRECTORS

20 AND EMPLOYEES OF SECURITIES FIRMS SERVICE ON

21 BOARDS OF DEPOSITORY INSTITUTIONS.— 

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

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

24 broker or dealer, any investment adviser, any 

25 investment company, or any other person en26 gaged principally in the issue, flotation, underVerDate Mar 15 2010 23:46 May 22, 2013 Jkt 029200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S985.IS S985

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1 writing, public sale, or distribution at wholesale 

2 or retail or through syndicate participation of 

3 stocks, bonds, debentures, notes, or other secu4 rities may not serve at the same time as an of5 ficer, director, employee, or other institution-af6 filiated party of any insured depository institu7 tion. 

8 ‘‘(B) EXCEPTION.—Subparagraph (A) 

9 shall not apply with respect to service by any 

10 individual which is otherwise prohibited under 

11 such subparagraph if the appropriate Federal 

12 banking agency determines, by regulation with 

13 respect to a limited number of cases, that serv14 ice by such individual as an officer, director, 

15 employee, or other institution-affiliated party of 

16 any insured depository institution would not un17 duly influence the investment policies of the de18 pository institution or the advice the institution 

19 provides to customers. 

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

21 to a determination under subparagraph (B), 

22 any individual described in subparagraph (A) 

23 who, as of the date of enactment of the Return 

24 to Prudent Banking Act of 2013, is serving as 

25 an officer, director, employee, or other instituVerDate Mar 15 2010 23:46 May 22, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S985.IS S985

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1 tion-affiliated party of any insured depository 

2 institution shall terminate such service as soon 

3 as practicable after such date of enactment and 

4 no later than the end of the 60-day period be5 ginning on such date. 

6 ‘‘(3) TERMINATION OF EXISTING AFFILI7 ATION.— 

8 ‘‘(A) ORDERLY WIND-DOWN OF EXISTING

9 AFFILIATION.—Any affiliation of an insured de10 pository institution with any broker or dealer, 

11 any investment adviser, any investment com12 pany, or any other person, as of the date of en13 actment of the Return to Prudent Banking Act 

14 of 2013, which is prohibited under paragraph 

15 (1) shall be terminated as soon as practicable 

16 and in any event no later than the end of the 

17 2-year period beginning on such date of enact18 ment. 

19 ‘‘(B) EARLY TERMINATION.—The appro20 priate Federal banking agency, after oppor21 tunity for hearing, may terminate, at any time, 

22 the authority conferred by the preceding sub23 paragraph to continue any affiliation subject to 

24 such subparagraph until the end of the period 

25 referred to in such subparagraph if the agency 


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1 determines, having due regard for the purposes 

2 of this subsection and the Return to Prudent 

3 Banking Act of 2013, 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 deter9 mination under subparagraph (B), an appro10 priate Federal banking agency may extend the 

11 2-year period referred to in subparagraph (A) 

12 from time to time as to any particular insured 

13 depository institution for not more than 6 

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

15 agency, such an extension would not be detri16 mental to the public interest, but no such exten17 sions shall in the aggregate exceed 1 year. 

18 ‘‘(4) DEFINITIONS.—For purposes of this sub19 section— 

20 ‘‘(A) the terms ‘broker’ and ‘dealer’ have 

21 the same meanings as in section 3(a) of the Se22 curities Exchange Act of 1934 (15 U.S.C. 

23 78c(a)); and 

24 ‘‘(B) the terms ‘investment adviser’ and 

25 ‘investment company’ have the same meanings 


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1 as in section 202 of the Investment Advisers 

2 Act of 1940 (15 U.S.C. 80b–2) and section 3 

3 of the Investment Company Act of 1940 (15 

4 U.S.C. 80a–3), respectively.’’. 

5 (b) PROHIBITION ON BANKING ACTIVITIES BY SECU6 RITIES FIRMS CLARIFIED.—Section 21 of the Banking 

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

8 the end the following new subsection: 

9 ‘‘(c) BUSINESS OF RECEIVING DEPOSITS.—For pur10 poses of this section, the term ‘business of receiving depos11 its’ includes the establishment and maintenance of any 

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

13 the Federal Reserve Act).’’. 

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

15 (1) IN GENERAL.—The Congress ratifies the in16 terpretation of the paragraph designated the ‘‘Sev17 enth’’ of section 5136 of the Revised Statutes of the 

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

19 16 of the Banking Act of 1933 and subsequent 

20 amendments) and section 21 of the Banking Act of 

21 1933 (12 U.S.C. 378) by the Supreme Court of the 

22 United States in the case of Investment Company 

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

24 with regard to the permissible activities of banks 


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1 and securities firms, except to the extent expressly 

2 prescribed otherwise by this section. 

3 (2) APPLICABILITY OF REASONING.—The rea4 soning of the Supreme Court of the United States 

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

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

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

8 Gramm-Leach-Bliley Act) shall continue to apply to 

9 subsection (aa) of section 18 of the Federal Deposit 

10 Insurance Act (as added by subsection (a) of this 

11 section) except to the extent the scope and applica12 tion of such subsection as enacted exceed the scope 

13 and application of such sections 20 and 32. 

14 (3) LIMITATION ON AGENCY INTERPRETATION

15 OR JUDICIAL CONSTRUCTION.—No appropriate Fed16 eral banking agency, as defined in section 3 of the 

17 Federal Deposit Insurance Act, by regulation, order, 

18 interpretation, or other action, and no court within 

19 the United States may construe the paragraph des20 ignated the ‘‘Seventh’’ of section 5136 of the Re21 vised Statutes of the United States (12 U.S.C. 24, 

22 as amended by section 16 of the Banking Act of 

23 1933 and subsequent amendments), section 21 of 

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

25 Federal Deposit Insurance Act more narrowly than 


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1 the reasoning of the Supreme Court of the United 

2 States in the case of Investment Company Institute 

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

4 construction and the purposes of such provisions. 

5 SEC. 3. REPEAL OF GRAMM-LEACH-BLILEY ACT PROVI6 SIONS. 

7 (a) FINANCIAL HOLDING COMPANY.— 

8 (1) IN GENERAL.—Section 4 of the Bank Hold9 ing Company Act of 1956 (12 U.S.C. 1843) is 

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

11 and (o). 

12 (2) TRANSITION.— 

13 (A) ORDERLY WIND-DOWN OF EXISTING

14 AFFILIATION.—In the case of a bank holding 

15 company which, pursuant to the amendments 

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

17 to control or be affiliated with any entity that 

18 was permissible for a financial holding company 

19 as of the date of enactment of this Act, any af20 filiation by the bank holding company which is 

21 not permitted for a bank holding company shall 

22 be terminated as soon as is practicable, and in 

23 no event later than the end of the 2-year period 

24 beginning on that date of enactment. 


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1 (B) EARLY TERMINATION.—The Board of 

2 Governors of the Federal Reserve System (in 

3 this Act referred to as the ‘‘Board’’), after op4 portunity for hearing, may terminate, at any 

5 time, the authority conferred by subparagraph 

6 (A) to continue any affiliation subject to such 

7 subparagraph until the end of the period re8 ferred to in such subparagraph, if the Board 

9 determines, having due regard to the purposes 

10 of this Act, that such action is necessary to pre11 vent undue concentration of resources, de12 creased or unfair competition, conflicts of inter13 est, or unsound banking practices, and is in the 

14 public interest. 

15 (C) EXTENSION.—Subject to a determina16 tion under subparagraph (B), the Board may 

17 extend the 2-year period referred to in subpara18 graph (A) from time to time as to any par19 ticular bank holding company for not more than 

20 6 months at a time, if, in the judgment of the 

21 Board, such an extension would not be detri22 mental to the public interest, except that no 

23 such extensions shall in the aggregate exceed 1 

24 year. 


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1 (3) TECHNICAL AND CONFORMING AMEND2 MENTS.— 

3 (A) BANK HOLDING COMPANY ACT OF

4 1956.—The Bank Holding Company Act of 

5 1956 (12 U.S.C. 1841 et seq.) is amended— 

6 (i) in section 2 (12 U.S.C. 1841)— 

7 (I) by striking subsection (p); 

8 and 

9 (II) by redesignating subsection 

10 (q) as subsection (p); 

11 (ii) in section 5 (12 U.S.C. 1844)— 

12 (I) in subsection (c)— 

13 (aa) in paragraph (2), by 

14 striking subparagraph (E); and 

15 (bb) by striking paragraphs 

16 (3), (4), and (5); and 

17 (II) by striking subsection (g); 

18 and 

19 (iii) by striking section 10A (12 

20 U.S.C. 1848a). 

21 (B) FEDERAL DEPOSIT INSURANCE ACT.— 

22 The Federal Deposit Insurance Act (12 U.S.C. 

23 1811 et seq.) is amended by striking section 45 

24 (12 U.S.C. 1831v) and inserting the following: 


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1 ‘‘SEC. 45. [REPEALED].’’. 

2 (C) GRAMM-LEACH-BLILEY ACT.—Subtitle 

3 B of title I of the Gramm-Leach-Bliley Act is 

4 amended— 

5 (i) by striking section 114 (12 U.S.C. 

6 1828a) and inserting the following: 

7 ‘‘SEC. 14. [REPEALED].’’; 

8 and 

9 (ii) by striking section 115 (12 U.S.C. 

10 1820a) and inserting the following: 

11 ‘‘SEC. 15. [REPEALED].’’. 

12 (b) FINANCIAL SUBSIDIARIES REPEALED.— 

13 (1) IN GENERAL.—Section 5136A of the Re14 vised Statutes of the United States (12 U.S.C. 24a) 

15 is amended to read as follows: 

16 ‘‘SEC. 5136A. [REPEALED].’’. 

17 (2) TRANSITION.— 

18 (A) ORDERLY WIND-DOWN OF EXISTING

19 AFFILIATION.—In the case of a national bank 

20 which, pursuant to the amendments made by 

21 paragraph (1), is no longer authorized to con22 trol or be affiliated with a financial subsidiary 

23 as of the date of enactment of this Act, such af24 filiation shall be terminated as soon as is prac25 ticable, and in no event later than the end of 


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1 the 2-year period beginning on that date of en2 actment. 

3 (B) EARLY TERMINATION.—The Comp4 troller of the Currency, after opportunity for 

5 hearing, may terminate, at any time, the au6 thority conferred by subparagraph (A) to con7 tinue any affiliation subject to such subpara8 graph until the end of the period referred to in 

9 such subparagraph, if the Comptroller deter10 mines, having due regard for the purposes of 

11 this Act, that such action is necessary to pre12 vent undue concentration of resources, de13 creased or unfair competition, conflicts of inter14 est, or unsound banking practices, and is in the 

15 public interest. 

16 (C) EXTENSION.—Subject to a determina17 tion under subparagraph (B), the Comptroller 

18 of the Currency may extend the 2-year period 

19 referred to in subparagraph (A) from time to 

20 time as to any particular national bank for not 

21 more than 6 months at a time, if, in the judg22 ment of the Comptroller, such an extension 

23 would not be detrimental to the public interest, 

24 except that no such extensions shall in the ag25 gregate exceed 1 year. 


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1 (3) TECHNICAL AND CONFORMING AMEND2 MENTS.— 

3 (A) FEDERAL RESERVE ACT.—The 20th 

4 undesignated paragraph of section 9 of the 

5 Federal Reserve Act (12 U.S.C. 335) is amend6 ed by striking the last sentence. 

7 (B) FEDERAL DEPOSIT INSURANCE ACT.— 

8 The Federal Deposit Insurance Act (12 U.S.C. 

9 1811 et seq.) is amended by striking section 46 

10 (12 U.S.C. 1831w) and inserting the following: 

11 ‘‘SEC. 46. [REPEALED].’’. 

12 (C) CLERICAL AMENDMENT.—The table of 

13 sections for chapter one of title LXII of the Re14 vised Statutes of the United States is amended 

15 by striking 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.—Section 206(a) of the Gramm-Leach-Bliley Act (15 

9 U.S.C. 78c note) is amended— 

10 (1) in paragraph (4), by inserting ‘‘and’’ after 

11 the semicolon at the end; 

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 the 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 CONGRESS.—Section 4(j) of the 


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1 Bank Holding Company Act of 1956 (12 U.S.C. 

2 1843(j)) is amended to read as follows: 

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 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 (as defined in section 3 of the Federal Deposit In20 surance Act) makes a determination or an extension under 

21 subparagraph (B) or (C) of paragraph (2) or (3) of section 

22 18(aa) of the Federal Deposit Insurance Act (as added 

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

24 (a)(2) or (b)(2) of section 3 of this Act, as the case may 

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1 mit a report of such determination or extension to the 

2 Congress. 

3 (b) CONTENTS.—Each report submitted to Congress 

4 under subsection (a) shall contain a detailed description 

5 of the basis for the determination or extension. 

Æ 


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