McFadden Act

The McFadden Act, enacted in 1927, was a U.S. law aimed at regulating banking across state lines. It generally prevented banks from opening branches outside their home state, encouraging local banking and reducing bank competition. The law also kept a separation between commercial banks and investment banks. Its goal was to strengthen local banks and prevent large banks from gaining too much power. However, it limited banking growth and innovation, and was eventually replaced by more modern laws like the Riegle-Neal Act in 1994, which allowed interstate banking and branch expansion.