I 

116TH CONGRESS 

1ST SESSION H. R. 2176 

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 

APRIL 9, 2019 

Ms. KAPTUR (for herself, Mr. LYNCH, Mr. KHANNA, Ms. SPEIER, Mrs. WATSON COLEMAN, Ms. SCHAKOWSKY, Mr. DEFAZIO, Ms. NORTON, Mr. 

MCGOVERN, Ms. GABBARD, Mr. COHEN, Ms. JAYAPAL, Ms. PINGREE, 

Mr. CICILLINE, Ms. ESHOO, Mr. TONKO, Ms. DELAURO, Mr. WELCH, 

Ms. LEE of California, Mrs. NAPOLITANO, Mr. POCAN, Mr. GRIJALVA, 

Mr. YARMUTH, Ms. ROYBAL-ALLARD, Ms. OMAR, and Ms. WILD) 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, 


kjohnson on DSK79L0C42 with BILLS
2 

•HR 2176 IH

1 SECTION 1. SHORT TITLE. 

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

3 Banking Act of 2019’’. 

4 SEC. 2. GLASS-STEAGALL REVIVED. 

5 (a) WALL BETWEEN COMMERCIAL BANKS AND SE6 CURITIES ACTIVITIES REESTABLISHED.—Section 18 of 

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

8 amended by adding at the end the following new sub9 section: 

10 ‘‘(bb) LIMITATIONS ON SECURITY AFFILIATIONS.— 

11 ‘‘(1) PROHIBITION ON AFFILIATION BETWEEN

12 INSURED DEPOSITORY INSTITUTIONS AND INVEST13 MENT BANKS OR SECURITIES FIRMS.—An insured 

14 depository institution may not be or become an affil15 iate of any broker or dealer, any investment adviser, 

16 any investment company, or any other person en17 gaged principally in the issue, flotation, under18 writing, public sale, or distribution at wholesale or 

19 retail or through syndicate participation of stocks, 

20 bonds, debentures, notes, or other securities. 

21 ‘‘(2) PROHIBITION ON OFFICERS, DIRECTORS, 

22 AND EMPLOYEES OF SECURITIES FIRMS SERVICE ON

23 BOARDS OF DEPOSITORY INSTITUTIONS.— 

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

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

26 broker or dealer, any investment adviser, any 


kjohnson on DSK79L0C42 with BILLS
3 

•HR 2176 IH

1 investment company, or any other person en2 gaged principally in the issue, flotation, under3 writing, public sale, or distribution at wholesale 

4 or retail or through syndicate participation of 

5 stocks, bonds, debentures, notes, or other secu6 rities may not serve at the same time as an of7 ficer, director, employee, or other institution-af8 filiated party of any insured depository institu9 tion. 

10 ‘‘(B) EXCEPTION.—Subparagraph (A) 

11 shall not apply with respect to service by any 

12 individual which is otherwise prohibited under 

13 such subparagraph if the appropriate Federal 

14 banking agency determines, by regulation with 

15 respect to a limited number of cases, that serv16 ice by such individual as an officer, director, 

17 employee, or other institution-affiliated party of 

18 any insured depository institution would not un19 duly influence the investment policies of the de20 pository institution or the advice the institution 

21 provides to customers. 

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

23 to a determination under subparagraph (B), 

24 any individual described in subparagraph (A) 

25 who, as of the date of the enactment of the ReVerDate Sep 11 2014 23:21 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2176.IH H2176

kjohnson on DSK79L0C42 with BILLS
4 

•HR 2176 IH

1 turn to Prudent Banking Act of 2019, is serv2 ing as an officer, director, employee, or other 

3 institution-affiliated party of any insured depos4 itory institution shall terminate such service as 

5 soon as practicable after such date of enact6 ment and no later than the end of the 60-day 

7 period beginning on such date. 

8 ‘‘(3) TERMINATION OF EXISTING AFFILI9 ATION.— 

10 ‘‘(A) ORDERLY WIND-DOWN OF EXISTING

11 AFFILIATION.—Any affiliation of an insured de12 pository institution with any broker or dealer, 

13 any investment adviser, any investment com14 pany, or any other person, as of the date of the 

15 enactment of the Return to Prudent Banking 

16 Act of 2019, which is prohibited under para17 graph (1) 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 appro22 priate Federal banking agency, after oppor23 tunity for hearing, may terminate, at any time, 

24 the authority conferred by the preceding sub25 paragraph to continue any affiliation subject to 


kjohnson on DSK79L0C42 with BILLS
5 

•HR 2176 IH

1 such subparagraph until the end of the period 

2 referred to in such subparagraph if the agency 

3 determines, having due regard for the purposes 

4 of this subsection and the Return to Prudent 

5 Banking Act of 2019, that such action is nec6 essary to prevent undue concentration of re7 sources, decreased or unfair competition, con8 flicts of interest, or unsound banking practices 

9 and is in the public interest. 

10 ‘‘(C) EXTENSION.—Subject to a deter11 mination under subparagraph (B), an appro12 priate Federal banking agency may extend the 

13 2-year period referred to in subparagraph (A) 

14 from time to time as to any particular insured 

15 depository institution for not more than 6 

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

17 agency, such an extension would not be detri18 mental to the public interest, but no such exten19 sions shall in the aggregate exceed 1 year. 

20 ‘‘(4) DEFINITIONS.—For purposes of this sub21 section, the terms ‘broker’ and ‘dealer’ have the 

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

23 Exchange Act of 1934 and the terms ‘investment 

24 adviser’ and ‘investment company’ have the meaning 

25 given such terms under the Investment Advisers Act 


kjohnson on DSK79L0C42 with BILLS
6 

•HR 2176 IH

1 of 1940 and the Investment Company Act of 1940, 

2 respectively.’’. 

3 (b) PROHIBITION ON BANKING ACTIVITIES BY SECU4 RITIES FIRMS CLARIFIED.—Section 21 of the Banking 

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

6 the end the following new subsection: 

7 ‘‘(c) BUSINESS OF RECEIVING DEPOSITS.—For pur8 poses of this section, the term ‘business of receiving depos9 its’ includes the establishment and maintenance of any 

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

11 the Federal Reserve Act).’’. 

12 (c) CONTINUED APPLICABILITY OF ICI V. CAMP.— 

13 (1) IN GENERAL.—The Congress ratifies the in14 terpretation of the paragraph designated the ‘‘Sev15 enth’’ of section 5136 of the Revised Statutes of the 

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

17 16 of the Banking Act of 1933 and subsequent 

18 amendments) and section 21 of the Banking Act of 

19 1933 (12 U.S.C. 378) by the Supreme Court of the 

20 United States in the case of Investment Company 

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

22 with regard to the permissible activities of banks 

23 and securities firms, except to the extent expressly 

24 prescribed otherwise by this section. 


kjohnson on DSK79L0C42 with BILLS
7 

•HR 2176 IH

1 (2) APPLICABILITY OF REASONING.—The rea2 soning of the Supreme Court of the United States 

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

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

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

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

7 to subsection (bb) of section 18 of the Federal De8 posit Insurance Act (as added by subsection (a) of 

9 this section) except to the extent the scope and ap10 plication of such subsection as enacted exceed the 

11 scope and application of such sections 20 and 32. 

12 (3) LIMITATION ON AGENCY INTERPRETATION

13 OR JUDICIAL CONSTRUCTION.—No appropriate Fed14 eral banking agency, by regulation, order, interpre15 tation, or other action, and no court within the 

16 United States may construe the paragraph des17 ignated the ‘‘Seventh’’ of section 5136 of the Re18 vised Statutes of the United States (12 U.S.C. 24, 

19 as amended by section 16 of the Banking Act of 

20 1933 and subsequent amendments), section 21 of 

21 the Banking Act of 1933, or section 18(bb) of the 

22 Federal Deposit Insurance Act more narrowly than 

23 the reasoning of the Supreme Court of the United 

24 States in the case of Investment Company Institute 


kjohnson on DSK79L0C42 with BILLS
8 

•HR 2176 IH

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

2 construction and the purposes of such provisions. 

3 SEC. 3. REPEAL OF GRAMM-LEACH-BLILEY ACT PROVI4 SIONS. 

5 (a) FINANCIAL HOLDING COMPANY.— 

6 (1) IN GENERAL.—Section 4 of the Bank Hold7 ing Company Act of 1956 (12 U.S.C. 1843) is 

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

9 and (o). 

10 (2) TRANSITION.— 

11 (A) ORDERLY WIND-DOWN OF EXISTING

12 AFFILIATION.—In the case of a bank holding 

13 company which, pursuant to the amendments 

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

15 to control or be affiliated with any entity that 

16 was permissible for a financial holding com17 pany, any affiliation by the bank holding com18 pany which is not permitted for a bank holding 

19 company shall be terminated as soon as prac20 ticable and in any event no later than the end 

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

22 enactment. 

23 (B) EARLY TERMINATION.—The Board of 

24 Governors of the Federal Reserve System, after 

25 opportunity for hearing, may terminate, at any 


kjohnson on DSK79L0C42 with BILLS
9 

•HR 2176 IH

1 time, the authority conferred by the preceding 

2 subparagraph to continue any affiliation subject 

3 to such subparagraph until the end of the pe4 riod referred to in such subparagraph if the 

5 Board determines, having due regard to the 

6 purposes of this Act, that such action is nec7 essary to prevent undue concentration of re8 sources, decreased or unfair competition, con9 flicts of interest, or unsound banking practices, 

10 and is in the public interest. 

11 (C) EXTENSION.—Subject to a determina12 tion under subparagraph (B), the Board of 

13 Governors of the Federal Reserve System may 

14 extend the 2-year period referred to in subpara15 graph (A) above from time to time as to any 

16 particular bank holding company for not more 

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

18 the Board, such an extension would not be det19 rimental to the public interest, but no such ex20 tensions shall in the aggregate exceed 1 year. 

21 (3) TECHNICAL AND CONFORMING AMEND22 MENTS.— 

23 (A) Section 2 of the Bank Holding Com24 pany Act of 1956 (12 U.S.C. 1841) is amended 

25 by striking subsection (p). 


kjohnson on DSK79L0C42 with BILLS
10 

•HR 2176 IH

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

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

3 amended— 

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

5 and 

6 (ii) by redesignating paragraph (5) as 

7 paragraph (3). 

8 (C) Section 5 of the Bank Holding Com9 pany Act of 1956 (12 U.S.C. 1844) is amended 

10 by striking subsection (g). 

11 (D) The Federal Deposit Insurance Act 

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

13 section 45. 

14 (E) Subtitle B of title I of the Gramm15 Leach-Bliley Act is amended by striking section 

16 114 (12 U.S.C. 1828a) and section 115 (12 

17 U.S.C. 1820a). 

18 (b) FINANCIAL SUBSIDIARIES REPEALED.— 

19 (1) IN GENERAL.—Section 5136A of the Re20 vised Statutes of the United States (12 U.S.C. 24a) 

21 is amended to read as follows: 

22 ‘‘SEC. 5136A. [REPEALED].’’. 

23 (2) TRANSITION.— 

24 (A) ORDERLY WIND-DOWN OF EXISTING

25 AFFILIATION.—In the case of a national bank 


kjohnson on DSK79L0C42 with BILLS
11 

•HR 2176 IH

1 which, pursuant to the amendments made by 

2 paragraph (1), is no longer authorized to con3 trol or be affiliated with a financial subsidiary 

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

5 such affiliation shall be terminated as soon as 

6 practicable and in any event no later than the 

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

8 of enactment. 

9 (B) EARLY TERMINATION.—The Comp10 troller of the Currency, after opportunity for 

11 hearing, may terminate, at any time, the au12 thority conferred by the preceding subpara13 graph to continue any affiliation subject to such 

14 subparagraph until the end of the period re15 ferred to in such subparagraph if the Comp16 troller determines, having due regard for the 

17 purposes of this Act, that such action is nec18 essary to prevent undue concentration of re19 sources, decreased or unfair competition, con20 flicts of interest, or unsound banking practices 

21 and is in the public interest. 

22 (C) EXTENSION.—Subject to a determina23 tion under subparagraph (B), the Comptroller 

24 of the Currency may extend the 2-year period 

25 referred to in subparagraph (A) above from 


kjohnson on DSK79L0C42 with BILLS
12 

•HR 2176 IH

1 time to time as to any particular national bank 

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

3 judgment of the Comptroller, such an extension 

4 would not be detrimental to the public interest, 

5 but no such extensions shall in the aggregate 

6 exceed 1 year. 

7 (3) TECHNICAL AND CONFORMING AMEND8 MENT.— 

9 (A) The 20th undesignated paragraph of 

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

11 335) is amended by striking the last sentence. 

12 (B) The Federal Deposit Insurance Act is 

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

14 1831w). 

15 (4) CLERICAL AMENDMENT.—The table of sec16 tions for chapter one of title LXII of the Revised 

17 Statutes of the United States is amended by striking 

18 the item relating to section 5136A. 

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

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

21 78c(a)(4)(B)) is amended— 

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

23 and (xi); and 


kjohnson on DSK79L0C42 with BILLS
13 

•HR 2176 IH

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

2 and (ix) as clauses (i), (ii), (iii), (iv), and (v), respec3 tively. 

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

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

6 78c(a)(5)(C)) is amended— 

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

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

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

10 (e) DEFINITION OF IDENTIFIED BANKING PROD11 UCT.—Subsection (a) of section 206 of the Gramm-Leach12 Bliley Act (15 U.S.C. 78c note) is amended— 

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

14 the end of paragraph (4); 

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

16 and inserting a period; and 

17 (3) by striking paragraph (6) and all that fol18 lows through the end of such subsection. 

19 (f) DEFINITION OF ACTIVITIES CLOSELY RELATED

20 TO BANKING.— 

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

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

23 1843(c)(8)) is amended by striking ‘‘the day before 

24 the date of the enactment of the Gramm-Leach-Bli25 ley Act’’ and inserting ‘‘January 1, 1970’’. 


kjohnson on DSK79L0C42 with BILLS
14 

•HR 2176 IH

1 (2) PROVISION ALLOWING FOR EXCEPTIONS

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

3 of section 4 of the Bank Holding Company Act of 

4 1956 (12 U.S.C. 1843(j)) is amended to read as fol5 lows: 

6 ‘‘(j) APPROVAL FOR CERTAIN POST-1970 SUB7 SECTION (c)(8) ACTIVITIES.— 

8 ‘‘(1) IN GENERAL.—Notwithstanding the limita9 tion of the January 1, 1970, approval deadline in 

10 subsection (c)(8), the Board may determine an activ11 ity to be so closely related to banking as to be a 

12 proper incident thereto for purposes of such sub13 section, subject to the requirements of this sub14 section and such terms and conditions as the Board 

15 may require. 

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

17 determination under paragraph (1), the Board shall 

18 consider whether performance of the activity by a 

19 bank holding company or a subsidiary of such com20 pany can reasonably be expected to result in a viola21 tion of section 18(bb) of the Federal Deposit Insur22 ance Act, section 21 of the Banking Act of 1933, or 

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

24 Banking Act of 2019, and other possible adverse ef25 fects, such as undue concentration of resources, deVerDate Sep 11 2014 23:21 Apr 17, 2019 Jkt 089200 PO 00000 Frm 00014 Fmt 6652 Sfmt 6201 E:\BILLS\H2176.IH H2176

kjohnson on DSK79L0C42 with BILLS
15 

•HR 2176 IH

1 creased or unfair competition, conflicts of interests, 

2 or unsound banking practices. 

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

4 the Board under paragraph (1) may take effect be5 fore the end of the 180-day period beginning on the 

6 date by which notice of the determination has been 

7 submitted to both Houses of the Congress together 

8 with a detailed explanation of the activities to which 

9 the determination relates and the basis for the de10 termination, unless before the end of such period, 

11 such activities have been approved by an Act of Con12 gress.’’. 

13 (g) REPEAL OF PROVISION RELATING TO FOREIGN

14 BANKS FILING AS FINANCIAL HOLDING COMPANIES.— 

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

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

17 SEC. 4. REPORTS TO THE CONGRESS. 

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

19 Governors of the Federal Reserve System, the Comptroller 

20 of the Currency, or another appropriate Federal banking 

21 agency makes a determination or an extension under sub22 paragraph (B) or (C) of paragraph (2) or (3) of section 

23 18(bb) of the Federal Deposit Insurance Act (as added 

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

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


kjohnson on DSK79L0C42 with BILLS
16 

•HR 2176 IH

1 Board, Comptroller, or agency shall promptly submit a re2 port of such determination or extension to the Congress. 

3 (b) CONTENTS.—Each report submitted to the Con4 gress under subsection (a) shall contain a detailed descrip5 tion of the basis for the determination or extension. 

Æ 


kjohnson on DSK79L0C42 with BILLS