You can petition the Obama Administration to reinstate the Glass Steagall Act, if you want to. The Depression-era legislation introduced a number of banking reforms to help protect customer deposits.
On President Obama’s awesomely web 2.0 White House website, there is an area called “We the People” that allows users to create online petitions that can gather online signatures, which launched in September. Obama promised it during his 2008 campaign and it’s finally here.
Petition Has Traction
Currently, there is a petition asking the Administration to “Re-establish and maintain the separation between investment banks and commercial banks.” The petition credits the Glass-Steagall Act for keeping the “country depression free for over 70 years…[it] was not unit 1999, and the creation of the Gramm-Leach-Bliley Act, that the separation [of investment and deposit banks] was broken.”
It has reached the 5,000-signature threshold it needed to reach for consideration by the 22nd of this month, and then some; it currently has 8,302 signatures.
The Glass-Steagall Act of 1933 created the FDIC, which is still around, and also a division between investment and commercial banks, which is no longer with us. The separation between investment banking and commercial banking was designed to protect depositors from speculative trading and the risks involved. It was overturned by a Republican Congress in 1999, right before the tech and real estate bubbles popped up.
Handicapping the Odds
Any petition that gets a certain number of signatures in a month will “go into a queue for the Administration to review and respond,” according to the website. The only deliverable that “We the People” actually promises is an official response from “the appropriate policy officials.” Now that’s direct democracy!
After the blowback from the Dodd-Frank bill, the Volcker Rule, and general malaise in the 112th Congress, it isn’t terribly likely that an online petition with 8,000 signatures will lead to more banking regulations. Maybe they’ll get a statement from the Consumer Financial Protection Bureau saying that they’re working on it. People interested in participating in direct democracy to make the government reform the banking industry would do better by joining the Occupy Wall Street movement.
And besides, the Volcker Rule as we understand it protects depositors from the riskiest sort of investment banking.