Proverbs 26:13-16
(ESV): “The sluggard says, ‘There is a lion in the road! There is a lion in the streets!’
As a door turns on its hinges, so does a sluggard on his bed. The sluggard buries his hand in the dish; it wears him out to bring it back to his mouth.
The sluggard is wiser in his own eyes than seven men who can answer sensibly.”
(HCSB): “The slacker says, ‘There’s a lion in the road–a lion in the public square!’ A door turns on its hinges, and a slacker, on his bed.
The slacker buries his hand in the bowl; he is too weary to bring it to his mouth.
In his own eyes, a slacker is wiser than seven men who can answer sensibly.”
(NASB): “The sluggard says, ‘There is a lion in the road! A lion is in the open square!’ As the door turns on its hinges, So does the sluggard on his bed.
The sluggard buries his hand in the dish; He is weary of bringing it to his mouth again.
The sluggard is wiser in his own eyes Than seven men who can give a discreet answer.”
Sources:
(1) https://www.ftc.gov/business-guidance/privacy-security/gramm-leach-bliley-act
(2) https://www.federalreservehistory.org/essays/glass-steagall-act
(3) https://www.historyextra.com/period/20th-century/in-a-nutshell-the-great-depression/
(4) https://www2.census.gov/programs-surveys/popest/tables/1900-1980/national/asrh/pe-11-1933.pdf
(5) https://drought.unl.edu/dustbowl/
(6) https://www.loc.gov/classroom-materials/united-states-history-primary-source-timeline/great-depression-and-world-war-ii-1929-1945/franklin-delano-roosevelt-and-the-new-deal/
(7) https://www.pbs.org/tpt/slavery-by-another-name/themes/sharecropping/
(8) https://www.fdic.gov/about
(9) https://www.investopedia.com/terms/r/regulationq.asp
(10) https://www.law.cornell.edu/wex/banking_act_of_1933_%28glass-steagall%29
(11) https://www.americanexpress.com/en-us/business/blueprint/resource-center/grow/commercial-banking-vs-investment-banking/
(12) https://www.ffiec.gov/exam/InfoBase/documents/02-con-g-l-b_summary_of_provisions-010416.pdf
(13) https://www.umsystem.edu/ums/fa/glb/act#:~:text=Bliley%20Act%20Program-,Gramm%2DLeach%2DBliley%20Act,which%20could%20result%20in%20substantial%20harm%20or%20inconvenience%20to%20any%20customer.,-In%202008%2C%20the
(14) https://www.federalreservehistory.org/essays/gramm-leach-bliley-act
(15) https://ballotpedia.org/Gramm-Leach-Bliley_Act
(16) https://www.govtrack.us/congress/bills/106/s900/summary#:~:text=It%20repealed%20part,President%20Bill%20Clinton.
Glass-Steagall Act of 1933
The Glass-Stegall Act of 1933, also known as the Banking Act of 1933, reshaped the American financial landscape before the Gramm-Leach-Bliley Act of 1999 repealed important key provisions.
The Glass-Steagal Act of 1933 (Banking Act of 1933) substantially reformed the banking industry by separated commercial banking from investment banking and creating the Federal Deposit Insurance Corporation (FDIC).
The History Behind The Act
President Franklin D. Roosevelt responded to the Great Depression with the creation of several important acts, The Banking Act of 1933 among them.
The Great Depression started around 1929 with the Wall Street stock market crash. The results of this crash impacted the United States & the world for most of the 1930’s. Unemployment numbers in the United States reached 15 million people with a total population estimated at 125 million people around 1933. Income levels sank to around 40%.
Starvation ensued. German banks collapsed in 1931. Britain defaulted on debts owed to the United States around 1934.
Fear instilled both consumers & investors resulting in an increase of storms after the 1929 crash. A literal drought occurred in the middle of America helping to create the Dust Bowl. As a result, 21% of all rural families were receiving federal emergency relief by 1937.
President Franklin Roosevelt promoted the “New Deal” to provide: relief, recovery, and reform. The New Deal was set to increase the power of the federal government to lift the country out of the Great Depression.
The New Deal ultimately resulted in: “banking reform laws, emergency relief programs, work relief programs, and agricultural programs” as well as, “union protection programs, the Social Security Act, and programs to aid tenant farmers and migrant workers.”
Creation Of The FDIC
The Glass-Steagal Act of 1933 allowed Congress to create the Federal Deposit Insurance Corporation (FDIC).
The FDIC, as an independent agency, was created to: “maintain stability and public confidence in the nation’s financial system.”
To ensure the FDIC’s mission–to instill stability & confidence–is accomplished, “the FDIC insures deposits; examines and supervises financial institutions for safety, soundness, and consumer protection; makes large and complex financial institutions resolvable; and manages receiverships.”
The Glass-Steagal Act of 1933 provided for the FDIC to insure bank deposits by creating “a pool of money collected from banks.”
This pool of money would help protect smaller rural banks because it combined the smaller rural banks’ wealth, with wealth stored at larger, less-rural banks. The public enjoyed initial deposit protections of $2,500 around Jan of 1939; which has risen to $250,00 (as of this writing).
All Federal Reserve banks, whose membership was acquired “on or before July 1, 1934, were required to become stockholders of the FDIC by such date. No state bank was eligible for membership in the Federal Reserve System until it became a stockholder of the FDIC. . . .”
The Separation of Commercial Banking from Investment Banking
The Glass-Steagal Act of 1933 also separated commercial banking from investment banking.
As a result of the Act, commercial banks were prohibited from “engaging in securities underwriting and dealing” and investment banks were prohibited “from taking deposits from customers.”
Investment banks typically undertake activities that “assist companies, financial institutions, and governments in executing transactions such as mergers and acquisitions (M&A), as well as initial public offering (IPO) underwriting.”
Commercial banks, typically hold federal depository charters, and work “with small-to medium-sized businesses” by providing “business checking accounts, business loans, [and a] business line of credit.” Additionally, most commercial bank deposits are ensured by the FDIC up to $250,000, with information found on the bank’s website.
Regulation Q
Regulation Q “mandated that interest could not be paid on checking accounts and gave the Federal Reserve the authority to establish ceilings on the interest that could be paid on other kinds of deposits.” This ban on interest paid was to help curve “speculative behavior by banks competing for customer deposits.”
Regulation Q’s prohibition of interest paid on checking accounts eventually helped create the idea of a money market fund. These money market accounts acted as workarounds to Regulation Q’s prohibition.
However, as of July 21, 2011, “financial institutions became allowed, but not required, to offer interest-bearing demand accounts.” This allowance was created as the Federal Reserve created rules that ensured “banks maintain sufficient capital to continue lending, despite losses or any downturns in the economy”.
Regulation Q was updated again in 2013 & “continues to go through changes.”
(ESV): “For lack of wood the fire goes out, and where there is no whisperer, quarreling ceases.”
(NKJV): “Where there is no wood, the fire goes out; And where there is no talebearer, strife ceases.”
(ASV): “For lack of wood the fire goeth out; And where there is no whisperer, contention ceaseth.”
The Repeal: Gramm-Leach-Bliley Act
The Gramm-Leach-Bliley Act [GLBA], also known as the Financial Services Modernization Act of 1999, was signed into law by President Clinton on November 12, 1999.
Senator Phil Gramm and Representatives Thomas Bliley & Jim Leach played important roles in the production, drafting, and ultimate passing of the GLBA.
The GLBA repealed aspects of the Glass-Steagall Act of 1933 by increasing how “commercial banks, investment banks, securities firms, and insurance companies” could interact and merge. The GLBA allows these organizations to act as a combination of an investment bank, commercial bank, or insurance company.
The Financial Privacy Rule & The Safeguards Rule.
The GLBA also requires financial institutions “to explain their information-sharing practices to their customers and to safeguard sensitive data.” The safeguarding of sensitive data requires an Information Security Program to be implemented and maintained.
Companies that engage in “financial activities” can be considered financial institutions under the GLBA. These “[f]inancial institutions must notify their customers about their information-sharing practices and tell consumers of their right to ‘opt-out’ if they don’t want their information shared with certain nonaffiliated third parties. In addition, any entity that receives consumer financial information from a financial institution may be restricted in it’s reuse and redisclosure of that information”
(NLT): “Smooth words may hide a wicked heart, just as a pretty glaze covers a clay pot.”
(NASB): “Like an earthen vessel overlaid with silver dross Are burning lips and a wicked heart.”
(HCSB): “Smooth lips with an evil heart are like glaze on an earthen vessel.”
(LBLA): “Como vasija de barro revestida de escoria de plata, así son los labios ardientes y el corazón perverso.”
(RVA-2015): “Como escorias de plata arrojadas sobre un tiesto, son los labios enardecidos y el corazón vil.”
(ERV): “Good words that hide an evil heart are like silver paint over a cheap, clay pot.”
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