Banking law is complicated. An understanding of how it came to be this way can be helpful. Presented in this timeline are some of the events responsible for the design of our current system.

1787-09-17 00:00:00

Signing of the Constitution

The Constitution contains several clauses to bring order to the nation's money affairs, but is silent on whether Congress can charter a bank.

1791-02-25 06:51:16

First Bank of the United States

At the urging of Alexander Hamilton, President Washington decides to sign a 20-year charter for the first Bank of the United States.

1809-02-25 06:51:16

United States v. Deveaux

The federal bank sues to regain tax imposed upon it by the state of Georgia, but loses on jurisdictional grounds.

1811-01-01 06:18:56

Charter Debates

The debates to renew the federal charter focus on constitutional issues. Congress fails to renew by one vote.

1814-08-24 06:18:56

The Capitol Burns

The British burn Washington D.C. causing runs on specie nationwide, prompting banks to stop redeeming their notes.

1816-02-01 18:34:29

Second Bank of the United States

Congress grants a new Bank of the United States a 20-year charter.

1819-02-01 15:07:25

McCulloch v. Maryland

A branch of the federal bank refused to pay a Maryland tax and the state sues for non-payment. This time, the court sides with the bank.

1832-07-01 14:29:17

Death of the Bank of the United States

President Jackson vetoes the rechartering bill passed by Congress, a victory in his struggle known as the Bank War.

1836-01-01 12:37:29

Free Banking Era

The country enters into a period in which bank charters no longer require a special act of the legislature but can be issued by state officials.

1846-01-01 12:37:29

Independent Treasury System

The federal government withdraws from the state banking system and establishes the Independent Treasury, prohibiting the government from accepting bank notes and depositing public funds in banks.

1861-04-12 12:37:29

Civil War

The outbreak of the Civil War exacerbates the defects of the country's financial system.

1863-01-19 23:58:44

National Bank Acts

The National Currency Act of 1863 and the National Bank Act of 1864 create a federal free banking regime, with federally chartered banks issuing a uniform national currency in order to help finance the war.

1865-03-03 20:29:25

New Federal Tax

Congress imposes a 10% tax on state bank notes to encourage conversion to national charters.

1869-12-01 14:52:45

Veazie Bank v. Fenno

Sustains the federal tax on state bank notes establishing a precedent for the federal government's power to discriminate against a lawful industry for regulatory purposes.

1870-01-01 14:52:45

State Checking

State banks embrace the checking account as a way around the tax on bank notes, preserving the dual banking system.

1873-01-01 14:52:45

Financial Panic

Without a central bank to regulate the money supply, financial panics afflict the US economy in 1873, 1884, 1890, 1893, and 1907.

1884-01-01 14:52:45

Panic of 1884

1890-01-01 14:52:45

Panic of 1890

1893-01-01 14:52:45

Panic of 1893

1907-10-01 14:52:45

Panic of 1907

Known as the Knickerboxer Crisis.

1913-12-23 11:35:23

Federal Reserve Act

The most revolutionary development in banking regulation since the Civil War, the Act establishes the Federal Reserve, a central banking system comprised of public and private entities. The act created a national currency and a monetary system that could respond effectively to stresses in the banking world and ensure stability in financial markets.

1914-01-16 05:15:39

Industry Consolidation

Consolidation of the banking industry parallels the "chain store" phenomenon, in which large retail stores began replacing local independent retailers.

1929-10-29 14:52:45

Black Tuesday

The Stock Market Crash of 1929 is the most devastating crash in US history and signals the beginning of the Great Depression.

1933-03-04 05:15:39

Banking Collapse

On the day President Franklin D. Roosevelt takes office, the banking system collapses after public confidence spirals out of control and runs on banks create nationwide panic.

1933-06-16 05:15:39

Banking Act

Congress quickly enacts the Banking Act (also know as the Glass-Steagall Act), prohibiting depository institutions from underwriting securities; creating federal deposit insurance; limiting the insurance rate banks could pay on deposits; gave national banks branching parity with state banks; and taking first step towards federal regulation of bank holding companies.

1956-05-09 13:48:06

Bank Holding Company Act

Allows holding companies to engage only in activities closely related to the business of banking.

1981-03-31 14:35:51

Depository Institutions Deregulation and Monetary Control Act

Mandates the phase-out of interest rate ceilings and permitted all depository institutions to offer consumers interest-bearing checking accounts.

1994-09-29 23:10:04

Riegle-Neal Interstate Banking and Branching Efficiency Act

The Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994 repealed the Douglas Amendment, allowing bank holding companies to acquire banks nationwide.

1999-11-12 23:10:04

Gramm-Leach-Bliley Act

The 1999 Gramm-Leach-Bliley Act toppled Glass-Steagall permitted banks to affiliate with companies engaged in the full range of financial services.

2008-09-15 23:10:04

Global Financial Crisis

September 15, 2008 – Lehman Brothers one of the largest and best known financial institutions files the largest bankruptcy in American history, kicking off the most devastating events in world financial markets since the stock market crashed and the Great Depression of the 1930s.


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