Gramm-Leach-Bliley Act

Gramm–Leach–Bliley Act

Other short titles	Federal Home Loan Bank System Modernization Act of 1999 Financial Services Modernization Act of 1999 Prime Act Program for Investment in Microentrepreneurs Act of 1999
Long title	An Act to enhance competition in the financial services industry by providing a prudential framework for the affiliation of banks, securities firms, and other financial service providers, and for other purposes.
Acronyms (colloquial)	GLBA
Nicknames	glibba, ATM Fee Reform Act of 1999
Enacted by	the 106th United States Congress
Effective	November 12, 1999
Citations
Public law	106–102
Statutes at Large	113 Stat. 1338
Codification
Acts repealed	Glass–Steagall Act
Titles amended	12 U.S.C.: Banks and Banking 15 U.S.C.: Commerce and Trade
U.S.C. sections created	12 U.S.C. § 24a, § 248b, § 1831v, § 1831w, § 1831x, § 1831y, § 1848a, § 2908 15 U.S.C. § 80b-10a
U.S.C. sections amended	12 U.S.C. § 78, § 377 15 U.S.C. § 80
Legislative history
Introduced in the Senate as S. 900 by Phil Gramm (R-TX) on April 28, 1999 Committee consideration by Committee on Banking, Housing, and Urban Affairs Passed the Senate on May 6, 1999 (54-44) Passed the House as the Financial Services Act of 1999 on July 1, 1999 (343-86) Reported by the joint conference committee on November 2, 1999; agreed to by the Senate on November 4, 1999 (90-8) and by the House on November 4, 1999 (362-57) Signed into law by President Bill Clinton on November 12, 1999

The Gramm–Leach–Bliley Act (GLBA), also known as the Financial Services Modernization Act of 1999, (Pub.L. 106–102, 113 Stat. 1338, enacted November 12, 1999) is an act of the 106th United States Congress (1999–2001). It repealed part of the Glass–Steagall Act of 1933, removing barriers in the market among banking companies, securities companies and insurance companies that prohibited any one institution from acting as any combination of an investment bank, a commercial bank, and an insurance company. With the bipartisan passage of the Gramm–Leach–Bliley Act, commercial banks, investment banks, securities firms, and insurance companies were allowed to consolidate. Furthermore, it failed to give to the SEC or any other financial regulatory agency the authority to regulate large investment bank holding companies. The legislation was signed into law by President Bill Clinton.

A year before the law was passed, Citicorp, a commercial bank holding company, merged with the insurance company Travelers Group in 1998 to form the conglomerate Citigroup, a corporation combining banking, securities and insurance services under a house of brands that included Citibank, Smith Barney, Primerica, and Travelers. Because this merger was a violation of the Glass–Steagall Act and the Bank Holding Company Act of 1956, the Federal Reserve gave Citigroup a temporary waiver in September 1998. Less than a year later, GLBA was passed to legalize these types of mergers on a permanent basis. The law also repealed Glass–Steagall's conflict of interest prohibitions "against simultaneous service by any officer, director, or employee of a securities firm as an officer, director, or employee of any member bank".

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