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Reichert: “Not familiar” with Glass-Steagall

Post by Lewis Kamb / The News Tribune on Oct. 18, 2010 at 4:04 pm | 5 Comments »
October 18, 2010 4:27 pm

Burning up the local blogosphere today are posts about three-term Republican Congressman Dave Reichert fielding a question at a candidates’ forum in Newcastle on Saturday.

The question involved the Glass-Stegall Act, a Great Depression-era law enacted by Congress to restore the public’s confidence in the banking system.

(Among other things, the law established the FDIC to regulate banking and separated commercial banks from Wall Street’s securities-holding investment banks. In 1999, Congress made significant changes to Glass-Steagall, including repealing its restrictions on affiliations between banks and Wall Street securities firms. Some critics now blame such deregulation for the nation’s recent subprime financial meltdown, leading to some calls that the original act be fully restored, including recent efforts by Washington’s junior U.S. Senator, Democrat Maria Cantwell.)

Here’s the verbatim exchange between the unseen questioner and Reichert (and the youtube video capturing the exchange):

Reichert: Yes ma’am?

Question: I agree with you that over-regulation is not a good thing, but do you think that they should reinstate the Glass-Steagall Act and at least separate the banks’ ability to gamble with our money?

Reichert: Well, the Glass-Steagall Act is one that I’m not familiar with. I’m sorry I have to go back and look at that, but I do agree it’s something that we haven’t dealt with on the House side in committees, uh, that I’ve had, so I’d be happy to look at that and come back and give you an answer on that.

Reichert’s opponent, Democrat Suzan DelBene, a former Microsoft executive, who also separately participated in the Newcastle forum, has since seized on the issue — sending out an “In Case You Missed it” press release today that simply directed recipients to a Seattle Weekly blog post about the matter.

For the record, DelBene devotes a section in her campaign’s “Economic Plan for the 8th Congressional District,” to Glass-Steagall. In part, her plan states:

I believe it’s essential that we have a modern equivalent of Glass-Steagall that safeguards investors,
protects consumers, and places more realistic limits on leverage. We need to ensure that the deposits
and investments of working men and women aren’t used to finance high-risk trades with unregulated
financial instruments.

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