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.

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  • Anitagallagher

    Did  you take out the information that Reinstating Glass-Steagall has been introduced into the House as H.R. 1489 by Rep. Marcy Kaptur (d-OH), and that it has 47 bipartisan co-sponsors? Why take it out–good to know where it stands in Congress.

    • Anonymous

      Didn’t take it out — I simply didn’t know! Thanks for the tip, I looked into it.

      I’d agree that the bill does have an impressive list of co-sponsors, but it was introduced back in May, and has been languishing in committee ever since. Let’s pretend it does pass the House somehow. How would this bill do in the Senate? I wouldn’t put money on it is all.But my point still stands: petitioning the President through this online form is pretty useless and has little to do with actual legislative activities. Actually, I bet an Obama endorsement of HR1489 would lead to Republicans pulling support, just because that’s how things work nowadays…

      • Anitagallagher

        Sorry–I confused where I had seen it. An amendment to restore Glass-Steagall was quashed by Barney Frank in the Dodd-Frank hearings when he refused to bring it to a vote, despite sponsorship by a bipartisan group of senators in spring 2010. Glass-Steagall is the only thing that will get rid of the worthless toxic debts, and allow the government to issue credit for rebuilding the U.S., as FDR’s write-off of worthless bank assets did in 1933. Pressure is building on the Senate. Let’s get behind it, rather than handicap it. H.R. 1489 started with one sponsor.  The Senate is on a recess until 10/31, and we can all reach them in their districts this week.