	Background1

The history of federal legislation significantly affecting banking, securities, capital markets, and financial services in general, may conveniently be divided into three chronological periods: Civil War to New Deal; New Deal Era; and 1956 to the present. This has prompted increasing federal regulation of customer financial information to protect customer privacy, deter criminal activity, and in the interest of national security. It was originally enacted during the Civil War by the National Bank Act of 1863 (Currency Act) (12 Stat. See Home Owner's Loan Act, Financial Institutions Reform, Recovery, and Enforcement Act. This early legislation of President Roosevelt's New Deal included many amendments to the Federal Reserve Act and the National Bank Act including the creation of the Federal Open Market Committee, which regulates and coordinates the purchase and sale of securities by Federal Reserve Banks. At the time, insurance was viewed more as a protective service business than as a "financial" service industry. It authorizes and requires additional record keeping and reporting by financial institutions and closer scrutiny of accounts held for foreign banks and of private banking conducted for foreign persons.
This report provides brief summaries of the major federal laws affecting financial institutions and markets. Arrangement is chronological according to the order of original enactment, with divisions into three periods. The first period begins with the Civil War era and includes the creation of national banks and the Federal Reserve System. The second period encompasses the New Deal and its aftermath, during which a wall was erected and reinforced between commerce and banking. The third or current period is characterized by statutes designed to modernize the financial services industry and, consistent with safety and soundness, eliminate barriers to the provision of nationwide integrated financial services. In the interest of national security, criminal law enforcement, and protecting personal privacy, the current period is also marked by increased federal regulation of customer information maintained by financial institutions.
For CRS reports on current topics, consult the "Financial Sector" subheading under "Issues in Focus" on the CRS home page: http://www.crs.gov/.