Banking Acts

First and Second Bank of the U.S. (1792-1836)

The early U.S. central banks that acted as fiscal agents for the federal government, issued bank notes, maintained a stable exchange rate for notes nationwide, and helped pay off Revolutionary War debts.

Free Banking Era (1836-1863)

The period with no U.S. central bank when banking was regulated only by states, marked by wide‑open entry, speculation, fraud, and frequent booms and busts.

National Banking Acts of 1863-1864

Laws that created nationally chartered banks with capital and reserve requirements, established a national currency, created the OCC, and began the dual banking system of state and national charters.

Federal Reserve Act of 1913

The act that created the Federal Reserve System as the U.S. central bank, giving it the role of lender of last resort and responsibility for stabilizing the banking system.

McFadden Act of 1927

Law that effectively prohibited interstate branching by banks and placed national and state banks on similar footing regarding branching.

Glass-Steagall / Banking Acts of 1933-1935

Legislation that created the FDIC, separated commercial banking from investment banking, imposed interest ceilings on many deposits, and strengthened the Fed's authority over bank holding companies and open market operations.

FDIC (creation and role)

Federal agency created in 1933 to provide deposit insurance, reduce bank runs, and stabilize the banking system by protecting small depositors.

Securities Act of 1933

Law requiring firms issuing securities to provide full, standardized financial disclosure to investors and to register offerings, aimed at preventing fraud in new issues.

Securities Exchange Act of 1934 and SEC Act

that created the Securities and Exchange Commission and regulated secondary markets, mandating ongoing disclosure and prohibiting securities fraud.

Era of Regulation (1933-1980)

Period when banking became the most heavily regulated U.S. industry, with tight controls on products, interest rates, competition, and geographic expansion to promote stability.

3-6-3 Rule

Nickname for the stable, low‑competition banking environment (1950s-1980s) when banks supposedly paid 3% on deposits, charged 6% on loans, and "golfed by 3."

DIDMCA (Depository Institutions Deregulation and Monetary Control Act) of 1980

Act that began phasing out Regulation Q, allowed NOW and ATS accounts, broadened thrift powers, and imposed uniform reserve requirements while extending Fed services to all depository institutions.

Garn-St. Germain Act of 1982

Law that further deregulated savings and loans, allowed money market deposit accounts, expanded thrift powers into commercial and capital market activities, and set the stage for higher risk taking.

Savings and Loan Crisis (1980s)

Systemic collapse of many S&Ls caused by deregulation, high and volatile interest rates, fraud, real estate and energy bubbles, and regulatory forbearance, ultimately requiring a large taxpayer‑funded cleanup.

FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act) of 1989

Crisis‑response law that ended the S&L industry as a distinct sector, abolished the FHLBB and FSLIC, created the OTS and RTC, raised thrift capital requirements, tightened activities, and increased deposit insurance premiums.

FDICIA (Federal Deposit Insurance Corporation Improvement Act) of 1991

Act that recapitalized the FDIC, limited "too big to fail" bailouts, introduced risk‑based insurance premiums, and established prompt corrective action rules requiring early intervention in troubled banks.

Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994

Law that removed most interstate banking restrictions and allowed bank holding companies and banks to branch and operate across state lines.

Gramm-Leach-Bliley (Financial Services Modernization Act) of 1999

Act that effectively repealed core parts of Glass-Steagall by allowing firms to combine commercial banking, investment banking, and insurance under financial holding companies.

Sarbanes-Oxley Act of 2002

Corporate governance and disclosure law that created the PCAOB, restricted auditor consulting conflicts, required CEO and CFO certification of financial statements, and strengthened audit committee independence.

Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010

Post‑crisis reform that created the CFPB, required central clearing and exchange trading for many derivatives, mandated annual bank stress tests, created the FSOC, and expanded resolution powers for systemically important institutions