How Engel helped to deregulate the banks

More than a decade ago, the House of Representatives and Senate voted overwhelmingly for the Gramm–Leach–Bliley Act, which repealed regulations set in place during the Great Depression to avoid a repeat of the market crash in 1929. 

Then-President Bill Clinton signed the bill into law in 1999 and a major set of regulations — called the Glass-Steagall Act — was repealed, thus removing all barriers between commercial and investment banks and allowing banks to lend and invest simultaneously.  

Many politicians and researchers believe that repeal was one of the reasons for the financial crash of 2008, which resulted in bank bailouts as part of the Troubled Asset Relief Program and the collapse or sale of many large financial firms, including Lehman Brothers, Bear Sterns and Merrill Lynch.

Rep. Eliot Engel, who represents parts of the Bronx, including Riverdale and also parts of Westchester and Rockland County, was one of the legislators who helped repeal Glass-Steagall, though he says that if he could go back in time, he would change his vote, which helped the legislation  pass 362 to 57 in congress. It passed 90 to 8 in the senate.

Beginning in 1997 and continuing through the early 2000s, Mr. Engel received campaign contributions from major banks that would profit from Glass-Steagall’s repeal.

Although the campaign contributions given to him by major banks (including Chase, Bank of America, CitiGroup, Goldman Sachs, MetLife and Morgan Stanley) never amounted to more than approximately 6 percent of his total campaign contributions on any given year from 1997 to 2000, the fact that these banks were repeatedly throwing $1,000 checks at him during that time (and mostly ignored him after the bill’s repeal) shows the height of the lobbying fury. At the time, Mr. Engel sat on the financial services component of the House Energy and Commerce Committee, which also likely made him a target.

Mr. Engel said he does not base how he votes on who gives him campaign contributions.

“My votes are based on what I think is right for the country,” he said.