Enhancing Multi-Class Share Disclosures Act

Mr. Chair, I yield myself such time as I may consume.

Mr. Chair, I rise today in strong opposition to H.R. 3383, the INVEST Act, which is an end-of-year holiday gift to Wall Street, paid for by the hard-earned savings of teachers, nurses, seniors, and other hardworking Americans.

While several of the provisions in the INVEST Act could support capital formation, the bill contains three poison pill provisions that make voting for the overall bill untenable. These provisions will raise costs and increase fees for people all across America.

At a time when the President's disastrous tariff policies are causing many Americans to struggle just to pay the bills, the INVEST Act would reduce Federal investor protections, jeopardizing the retirement savings of millions of regular, hardworking Americans, but it didn't have to be this way.

I worked closely with the Capital Markets Subcommittee chairwoman, Mrs. Wagner, and the full committee chairman, Mr. Hill, just to get to ``yes'' on this bill, and 19 of the provisions in this bill would pass overwhelmingly through this House.

Unfortunately, Republicans could not resist the demands of their Wall Street, and they threw in three poison pills at the last minute that would make Wall Street richer and retirement more unaffordable.

Mr. Chair, I will tell you about these poison pill provisions and what they will do.

The first section, 202, would remove the 403(b) retirement plans relied on by millions of teachers, nurses, and nonprofit workers from the protections and oversight of the Federal securities laws. This massive $1 trillion deregulation of 403(b) plans would allow Wall Street middlemen and unlicensed, so-called retirement consultants to free themselves of SEC's rules to always keep the planholders' best interests in mind.

It is not surprising that, while those Wall Street middlemen are heavily lobbying this bill, the groups and unions representing the teachers, nurses, and other workers who would be affected strongly oppose. The National Education Association, representing over 3 million educators all across the country; the American Federation of Teachers, representing over 1.5 million teachers and healthcare professionals; National Nurses United, representing over 200,000 registered nurses; and the American Federation of State, County, and Municipal Employees, representing 1.3 million public service workers, all oppose this bill.

Mr. Chair, that is not all. Let's look at the second poison pill, section 205.

This provision will make electronic delivery of financial documents the default for all investors, including seniors, even though the majority of seniors prefer and rely on paper delivery. The bill would automatically switch investors from the preferred paper delivery to electronic delivery, even if the investor has recently declined to receive statements.

Millions of seniors still don't have access to reliable internet or an email account. As a result of this provision, they would now be in the dark about their finances and investments. This means that they would be less likely to notice junk fees and unnecessary trades executed by their financial professional.

Not surprisingly, the AARP, representing 110 million Americans, strongly opposed this provision when it was considered in the committee during this Congress.

Finally, the third poison pill, section 206, allows Wall Street to vastly increase the amount of risky, opaque private assets they sell to Main Street investors. It does so by allowing what is known as closed- end funds, which is similar to mutual funds and used by many everyday investors to invest up to 100 percent of their assets in shares of private equity and venture capital funds and directly into the unregistered shares of private companies.

Current law limits these kinds of private assets to only 15 percent of a fund's total assets. This is because private assets are very different from the

publicly traded stocks and bonds that most folks are used to investing in.

Unlike publicly traded stocks, private assets are not registered with the SEC, meaning Wall Street's cop on the block and all of the ensuing protections that come from its oversight are not in place. They are also harder to value, contain far fewer disclosures around risk, and are very hard for investors to get their money back due to withdrawal limits and long lockup periods.

For these reasons, our securities laws have guardrails on Wall Street so that they don't peddle junky assets to investors who can't understand the financial risks. These various provisions and the bill as a whole are opposed by the groups who are fighting on behalf of everyday Americans, including, again, the AFL-CIO; American Federation of Teachers; Americans for Financial Reform; Public Citizen; the Service Employees International Union; Communication Workers of America; American Federation of State, County, and Municipal Employees; National Education Association; National Nurses United; and the United Auto Workers.

The State securities regulators also came out against the bill just this morning. No one cares more about capital formation than our State governments, but they also care that deregulation does not lead to harming investors and small businesses.

Mr. Chair, we support capital formation. We tried so hard to get an agreement, and we thought we had one because of the provisions that we could be bipartisan on because we, too, support capital formation. What we don't support is these poison pills that will just do the kind of deregulation that would put so many hardworking people at risk. As I mentioned, the teachers and the nurses and all of the other labor unions, et cetera, are really, really worried that these poison pills will do so much harm that we had to plea but walk away from what we thought we could get as a bipartisan operation because of the poison pills at the last minute.

Mr. Chair, I reserve the balance of my time.

Mr. Chairman, I have no further speakers, and I am prepared to close if the gentlewoman from Missouri has no further speakers.

Mr. Chair, I yield myself such time as I may consume.

Now, this so-called e-delivery provision makes electronic delivery the default communication method for all investors, whether they like it or not.

AARP research indicates that a majority of American investors, 80 percent of which are 55 years of age or older, prefer to receive their documents in paper. However, under this provision, investors who prefer to receive information about their investments by paper will need to opt in to paper delivery by computer even if they previously opted for paper statements.

This is why the e-delivery provision is opposed by the AARP and most major unions and investor protection organizations, including, again: Americans for Financial Reform; American Federation of Labor and Congress of Industrial Organizations, AFL-CIO; Communications Workers of America, CWA; Consumer Federation of America, CFA; National Education Association, NEA; the American Federation of Teachers, AFT; National Nurses United, NNU; Public Citizen; Service Employees International Union, SEIU; The Academy of Financial Education, AFE; United Auto Workers, UAW; the North American Securities Administrators Association, NASAA; and the American Federation of State, County, and Municipal Employees, AFSCME.

Now, I have two big problems with this provision. Number one: Investors who previously told their adviser that they had to have paper statements should still be able to receive them because investors should be the ones in charge of how they monitor their own money.

Number two: Any savings advisers earn because they are not sending paper notices should be refunded to the investor as a credit on their statement. Financial advisers should not be able to make a profit by providing fewer services to their investors, especially a service that most investors want and demand.

However, Republicans flatly refuse to include either provision, demonstrating what this section really is: a holiday gift to Wall Street.

Financial firms will save potentially billions of dollars by making it harder for American investors to access information about their own accounts.

For these reasons, I strongly encourage you to vote against H.R. 3383.

Let me just say to the Members of this House of Representatives that if, in fact, we were working on a bipartisan agreement on this INVEST Act and we found that we could agree on maybe 19 out of 22, that they would literally walk away from the negotiations. They would walk away from our chance to be bipartisan rather than have a bill that would actually be a bill that we all want, understanding what our businesses need for capital improvement, et cetera, because Wall Street wants these three poison pills. They would walk away from all the work that we have done. It does not make good sense.

Mr. Chair, for that reason, we can't vote for it. We cannot vote for it with these poison pills. They are too harmful.

Mr. Chair, I reserve the balance of my time.

Mr. Chair, I yield myself such time as I may consume.

Mr. Chair, Republicans claim that section 202 purports to modernize retirement options for nurses, teachers, and nonprofit workers. Let me be clear: It does not.

In reality, this provision opens these workers' retirement accounts called 403(b) plans to complex, high-fee products like collective investment trusts and variable annuities. It also removes these plans from the protections and oversight of our Federal securities laws.

I cannot imagine why we would want to make it more difficult and dangerous for some of the most valuable members of our community to save for retirement, but that is exactly what section 202 does. We did not debate this section. We did not have a hearing on it. No one has asked questions about it.

I have to wonder, why is it here? Is it because those whose savings are in 403(b) plans, the teachers and nurses, asked for it? No, they did not. They do not support this provision. In fact, this section is opposed by major unions and investor protection groups.

Let me make sure that it is very well understood who is opposing these poison pills: American Federation of Labor and Congress of Industrial Organizations, AFL-CIO; Communications Workers of America, CWA; Consumer Federation of America, CFA; National Education Association, NEA; American Federation of Teachers, AFT; National Nurses United, NNU; Public Citizen; Service Employees International Union, SEIU; The Academy of Financial Education, AFE; the United Auto Workers, UAW; North American Securities Administrators Association, NASAA; and American Federation of State, County and Municipal Employees, AFSCME.

To be clear, this provision is in this bill because Wall Street asked for it. They want to be able to spend the retirement savings of public employees on these most expensive, riskier assets so they can get richer.

Voting for this bill means choosing Wall Street over the interests of the American people, and I cannot imagine doing that. That is why I urge my colleagues to vote against this bill with these poison pills in it that I have described over and over again.

Mr. Chair, I reserve the balance of my time.

Mr. Chair, I continue to reserve my time.

Mr. Chair, I yield myself the balance of my time.

Mr. Chair, I have heard a lot from Republicans about how the INVEST Act will expand access to capital and increase investor opportunity. The inclusion of three poison pills in this bill shows they are not serious about protecting the investors. They care more about funneling their money to Wall Street.

If the Republicans are serious about increasing investment in small business and expanding opportunities for investors to participate in new markets, we could have passed a clean bill with nearly unanimous support. Instead, the Republicans, unable to say ``no'' to Wall Street, have jammed in three bills that hurt workers and those saving for a dignified retirement.

Don't just take my word for it. These provisions are opposed by the actual people who would be harmed. Again, these are teachers, nurses, seniors, and others.

The bill is opposed by the AFL-CIO; the American Federation of Teachers; the Americans for Financial Reform; Public Citizen; Service Employees International Union; Communications Workers of America Union; American Federation of State, County, and Municipal Employees; National Education Association; National Nurses United; and the United Auto Workers.

These unions represent over 20 million Americans. Other organizations are fighting for the interests of everyday Americans, and so should everyone in this Chamber.

Mr. Chair, let me close by saying, oftentimes we hear from both sides of the aisle how much they care about our seniors and how they want to do so much for our seniors. Here they have the opportunity to resist a poison pill that would absolutely be opposed to what seniors have said they want and they don't want.

I want Members of this Chamber to ask their grandmothers and their great-grandmothers and others who are investors, who have spent their time working and earning and making sure that they have retirement, et cetera: Do they want to receive their information on the internet or on a computer they don't have or they don't use or they haven't learned how to use?

Would my colleagues on the opposite side of the aisle simply try and understand why getting paper information about their investments is what seniors want?

If they want to support seniors, why would they allow Wall Street to stop sending the paper information and make billions of dollars and not even talk about making them spend the billions of dollars on seniors in some way? I don't get it.

Mr. Chair, I am raising the question. My colleagues on the other side of the aisle should raise the question. If they want to help seniors, this poison pill does not help them in any way. It denies them the opportunity to understand what is happening to their investments on paper that they can read, because they don't have access to or don't engage with the digital platform offered to all of us. They cannot engage because they are not ready to.

Mr. Chair, I yield back the balance of my time.

Mr. Chairman, I rise in opposition to the amendment.

Mr. Chair, I yield myself such time as I may consume.

Mr. Chair, I oppose Mr. Self's amendment to strike section 307 of the INVEST Act.

Section 307 is identical to H.R. 3357 sponsored by guess who? It is sponsored by Mr. Meeks.

It closes gaps in the disclosures made to investors where there are multi-class government structures. Companies that use these structures offer different share classes, such classes having different rights like voting rights. These structures can allow corporate insiders to retain an outsize amount of voting power relative to their shares.

For instance, Mark Zuckerberg has been able to consolidate control over Facebook, and now Meta, primarily due to the dual-class share structure that he established. This structure allows him and a small group of insiders to hold class B shares which have 10 times the voting power of the class A shares sold on the open market.

As a result, Zuckerberg has maintained nearly 60 percent of the voting power in Facebook, even though his shares account for only about 18 percent of shares.

Mr. Meeks' provision was recommended by the SEC's Investors Advisory Committee and passed out of committee with unanimous support, and it has also passed both this Congress and the prior two nearly unanimously.

Investors should have the clearest information available to make the best decision for themselves, but Mr. Self's amendment would deny them that.

Mr. Chair, I therefore encourage all Members to vote against this amendment, and I reserve the balance of my time.

Mr. Chair, I yield 2 minutes to the gentlewoman from Missouri (Mrs. Wagner) to speak in opposition to Mr. Self's amendment.

Mr. Chairman, I have the greatest respect for the gentlewoman from Missouri and have enjoyed working with her, but she tends not only to agree with me on this amendment but she feels very strongly about it. I urge my colleagues to reject this amendment so that investors have the basic information they need about a company's governing structure to make the best investment decisions for themselves.

Mr. Chair, I yield back the balance of my time.

Mr. Chair, I claim the time in opposition.

Mr. Chair, I yield myself such time as I may consume.

I oppose Mr. Self's amendment to limit the ability of the SEC to carry out its mandate in section 105.

Section 105, which is identical to H.R. 4449, sponsored by Mr. Vicente Gonzalez and Mr. Garbarino, directs the SEC to promote and protect small businesses by creating a small business office within each rulemaking division of the SEC, ensuring that the SEC has small business experts across the agency.

Mr. Gonzalez' provision will ensure that the SEC rules are tailored to the needs of small businesses.

Mr. Self's amendment makes this provision impossible to implement by blocking the SEC from hiring any new employees to carry out the work.

At a time when small businesses are struggling to stay afloat due to the impacts of Trump's harmful tariffs and disastrous economic policies, it is crucial that small businesses are represented through every step of the regulatory process.

If we are serious about helping small businesses, we must make sure our regulators have the expertise needed to support them. I, therefore, encourage all Members to vote ``no'' on this amendment.

Mr. Chair, I reserve the balance of my time.

Mr. Chair, with costs soaring and small businesses struggling to weather the impacts of the Trump tariffs and his administration's war on small businesses, it is crucial that we do what we can to make sure government is working for them, not against them.

I urge my colleagues to vote ``no'' on this amendment.

Mr. Chair, I yield back the balance of my time.

Mr. Chair, as the designee of Ms. Garcia of Texas, I have an amendment at the desk.

Mr. Chair, I rise in support of this amendment originally offered by my colleague, Representative Garcia. Ms. Garcia's amendment would make law an important requirement that was already carefully considered and made final by FinCEN, but which has been delayed potentially indefinitely under this administration. Her amendment requires foreign hedge funds to put in place anti-money laundering policies that will ensure the safety of our markets and prevent bad actors from using these funds to launder criminal profits.

During a time when our markets are seeing unprecedented fraud and abuse, we should not wait to increase AML protections. We should not wait for FinCEN. We should do what we can to strengthen our markets now.

Mr. Chair, I reserve the balance of my time.

Mr. Chair, I reserve the right to close.

Mr. Chairman, I believe I have the right to close. Are you indicating that I do not have the right to close?

I have the right to close?

Mr. Chair, if I don't have the right to close, I am prepared to close, and I yield myself the balance of my time.

Mr. Chair, I encourage all Members to vote ``yes'' on Ms. Garcia's amendment to strengthen the Bank Secrecy Act and anti-money laundering requirements for foreign investment advisers. This reasonable and well-considered provision will ensure increased safety for our markets from abuse by terrorists, prohibited entities, and other bad actors abroad.

Mr. Chairman, I yield back the balance of my time.

Mr. Chair, I demand a recorded vote.

Mr. Chair, I have an amendment at the desk.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, H.R. 3383 seeks to provide small businesses with more opportunities to access capital. A key avenue for most small companies to raise money is by seeking investments from a small number of accredited investors.

These offerings, made under SEC regulation D, are exempt from registration with the SEC. However, these companies are required to file basic disclosures with the SEC on Form D, which is available to the public. The information provided on Form D is often bare bones, incomplete, or false.

This makes it difficult for investors to understand the parameters of an exempt offering. What is worse, many bad actors located in the United States and all around the world are using reg D to misrepresent that they are SEC compliant, using false information on Form D and posting it to the SEC's public database, EDGAR. These fraudsters tell unsuspecting U.S. investors that they are registered with the SEC.

We must stop these bad actors from using Form D to take hard-earned money out of Americans' savings and putting it into the hands of criminals.

My amendment aims to fix this problem by requiring additional information about the identity of the company and the scope of its offering prior to making any sales. My amendment also requires a company to update Form D when there is a mistake or material change in the information and when the offering is complete.

Furthermore, to prevent fraud, the amendment requires Form D filers to provide additional verification of their identity: who they are, such as registrations with the State Secretary of State, and to certify that the information in the Form D is accurate.

Mr. Chairman, providing false information on Form D would expose the filer to criminal penalties. Form D reforms are a key priority for our States' securities regulators. They argue that many bad actors are harming legitimate businesses needing to raise capital under SEC's regulation D and that Form D reforms would lead to more capital formation.

Mr. Chair, this is simple. It is very clear. I urge my colleagues to support this amendment, and I reserve the balance of my time.

Mr. Chairman, I reserve the balance of my time.

Mr. Chair, I yield myself the balance of my time to close.

I encourage all Members to vote ``yes'' on my amendment to strengthen information for people investing in private markets. As the opportunities to invest in private companies grow, in particular through measures promoted in this bill, we must take steps to ensure that investors are provided with accurate and complete information about what they are investing in.

These are simple, commonsense protections that will make a big difference in ensuring accountability for exempt offerings and preventing the proliferation of fraud around form D filings.

Mr. Chairman, I yield back the balance of my time.

Mr. Chairman, I rise to offer an amendment that would make junk fees illegal and require investment firms to clearly disclose the other fees they charge.

For far too long, Wall Street has been charging junk fees that sap the investment returns of hardworking Americans and make it harder to save for retirement.

This amendment makes clear that investment firms, be they an investment company, an investment adviser, or a broker-dealer, cannot charge any fees that are either not clearly disclosed to investors in advance or exceed the value of the services provided. These could include dubious fees like account closure fees, excessive markups, and undisclosed compensation or sales arrangements, inactivity fees, and so-called regulatory compliance fees.

In addition to outright banning junk fees, this amendment requires investment firms to clearly disclose to their customers in advance any fees that they charge that customer.

Investors should not face any surprises when it comes to the cost of investing their savings. Making sure that investors clearly know the risk and costs of choosing an investment firm or product should receive unanimous support from all Members of this body.

Finally, this amendment would bring unprecedented transparency to how investment firms profit from the fees they charge investors. These firms would be required to annually report to the SEC the total profit earned from fees as a percentage of assets under management.

The SEC would publish this information on a public database similar to a broker check along with a visual that shows whether these fees are high, low, or average when compared with their peer firms.

By making this data public, American investors would be able to know how the fees charged by their investment firm compare to others and would also create market pressure on firms to make savings for the future more affordable for Americans.

I strongly, strongly encourage all Members to support this amendment because this amendment is a commonsense solution that protects investors and brings accountability to the industry.

Mr. Chair, I reserve the balance of my time.

Mr. Chairman, I yield myself the balance of my time to close.

I urge all Members to vote ``yes'' in support of my amendment to prohibit junk fees and make all other fees more transparent to investors.

My amendment will make sure that hardworking Americans are safe from undisclosed or unreasonable fees. It will require advanced notice on fees before they are charged to an investor and will make public the amount that financial firms earn from fees.

I am sure you can agree that every American should have a right to know what they are paying for, and that is why I am asking for a vote on this amendment.

It has been acknowledged by the supporters that they are so pleased for this debate that we are having this evening. They have indicated it is long past due that consumers have this kind of advocacy and that consumers have this kind of support from the Members of Congress who understand the rip-offs and the fraud and the disrespect that they have received for far too long.

This amendment is supported by all of those organized unions and advocacy groups that I have spoken about earlier this evening. They all support this amendment as they support the bill that we have been working so hard for.

Mr. Chair, I yield back the balance of my time.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days to revise and extend their remarks and include extraneous material on the bill under consideration.

Mr. Chair, I yield myself such time as I may consume.

Mr. Chair, I rise in support of H.R. 3383, the Incentivizing New Ventures and Economic Strength Through Capital Formation Act, the INVEST Act.

America's economic strength has always come from our builders, inventors, and risk takers. We are a nation of startups born in garages, family businesses turned into thriving enterprises, and Dreamers who take an idea and make it real.

Today, too many of those dreams face serious obstacles. Right now, three areas--Silicon Valley, Boston, and New York--account for nearly three quarters of all venture capital funding. Entrepreneurs across the country are told to move to a coast or move on.

Meanwhile, mountains of red tape are stifling growth. When a founder spends more time navigating Washington rules than creating jobs, something is broken. We cannot win the next century with a playbook written in the last one. The INVEST Act is our course correction, and it builds on proven success.

More than a decade ago, a divided Congress came together to pass the JOBS Act. It worked. Companies that went public using JOBS Act provisions expanded their workforce by an average of 150 percent in just 3 years.

This legislation that we are talking about right now, the INVEST Act, takes the next step. Our Capital Markets Subcommittee heard from entrepreneurs and small businesses that can't access capital in their own communities, Main Street investors with deep expertise who are locked out of opportunities just because they aren't wealthy enough, and emerging fund managers who confirmed that outdated rules are holding America back.

These aren't abstract problems. They are costing us jobs, innovation, and economic growth in every district that we represent.

The INVEST Act delivers targeted solutions. It revises the ``accredited investor'' definition to recognize that financial sophistication comes from what you know, not just from how much you earn.

It also reduces the regulatory burden that discourages companies from going public. Small businesses will find it easier to raise capital locally so that economic success can be shared within communities, not just concentrated on the coasts.

This is bipartisan, pragmatic policy. I am proud to lead this effort along with our esteemed chairman, Chairman Hill, and my colleagues across the aisle, Representatives Meeks and Gottheimer. I would like to note that the ranking member voted for 19 of the 22 bills included in this package.

There is a reason this bill has won resounding support. I think we are at 81 total organizations from every corner of the country. When we expand access to capital and opportunity, everyone wins. More companies will choose to grow here, go public here, and create jobs here instead of overseas. More Americans and everyday retail investors will invest in innovation, and more communities across the country will participate in the prosperity that entrepreneurship creates.

I urge my colleagues to support this legislation, H.R. 3383, the INVEST Act. Mr. Chair, I reserve the balance of my time.

Mr. Chairman, I yield myself such time as I may consume.

Mr. Chairman, I would like to just mention to the Chair that those three so-called poison pills that the ranking member keeps mentioning, these bills passed overwhelmingly in the Financial Services Committee with strong bipartisan support.

Mr. Chairman, I include in the Record the 81--let me underscore, 81-- organizations that are supporting this piece of legislation, everything from the American Retirement Association to the Small Business and Entrepreneurship Council, the United Way, the U.S. Black Chambers, the U.S. Chamber of Commerce, even the YMCA.

H.R. 3383--INVEST Act (Wagner) (FSC)

groups supporting

1. Accredited Investor Alliance

2. American Benefits Council

3. American Council of Life Insurers (ACLI)

4. American Heart Association

5. American Retirement Association (ARA)

6. American Securities Association (ASA)

7. Ameriprise Financial

8. Angel Capital Association (ACA)

9. AngelList

10. Arizona Technology Council

11. Association of Women's Business Centers

12. Biotechnology Innovation Organization (BIO)

13. Cancer Fund Impact Investments

14. Capital Integration Systems (CAIS)

15. Carta

16. Center for American Entrepreneurship (CAE)

17. Charles Schwab

18. Chorus America

19. Coalition for Business Development (CBD)

20. Committee of Annuity Insurers (CAI)

21. Council on Foundations

22. Crowdfunding Professional Association (CFPA)

23. Defined Contribution Alternatives Association (DCALTA)

24. Edward Jones

25. Empower

26. Engine

27. Fidelity Investments

28. Financial Services Institute

29. Financial Technology Association (FTA)

30. Franklin Templeton

31. Great Gray Trust Company

32. Habitat for Humanity International

33. Illinois Venture Capital Association

34. Incubate

35. Independent Sector

36. Inland Real Estate Group of Companies

37. Institute for Portfolio Alternatives (IPA)

38. Insured Retirement Institute (IRI)

39. Investment Adviser Association (IAA)

40. Investment Company Institute (ICI)

41. Investor Choice Advocates Network (ICAN)

42. LPL Financial

43. Lutheran Services in America

44. Make Startups

45. Managed Funds Association (MFA)

46. Maryland Technology Council

47. Massachusetts Biotechnology Council (MassBio)

48. Meals on Wheels America

49. Michigan Venture Capital Association

50. MissionSquare

51. Nareit

52. Nasdaq

53. National Association of Insurance and Financial

Advisors (NAIFA)

54. National Association of Manufacturers (NAM)

55. National Small Business Association

56. National Council of Nonprofits

57. National Bankers Association

58. National Venture Capital Association (NVCA)

59. Nationwide

60. New England Venture Capital Association

61. New York Stock Exchange

62. Prudential

63. Rocky Mountain Venture Capital Association

64. Securities Industry and Financial Markets Association

(SIFMA)

65. Small Business & Entrepreneurship Council

66. Small Business Investor Alliance (SBIA)

67. Small Business Multi-Cloud Coalition

68. SPARK Institute

69. Stable Value Investment Association (SVIA)

70. State Street Investment Management

71. Technology Association of Georgia (TAG)

72. Technology Councils of North America (TECNA)

73. Texas Venture Alliance

74. TIAA

75. United Way Worldwide

76. U.S. Black Chambers, Inc.

77. U.S. Chamber of Commerce

78. Coalition Letter from 25+ Organizations Representing

the US Innovation Ecosystem

79. Venture Atlanta

80. Y Combinator

81. YMCA of USA

Mr. Chair, I yield 3\1/2\ minutes to the gentleman from Arkansas (Mr. Hill), the esteemed chairman of the Financial Services Committee and my wonderful partner in this capital markets endeavor.

Mr. Chairman, I am not even close to closing. I yield 2 minutes to the gentleman from Michigan (Mr. Huizenga), my good friend and the sponsor of the Improving Disclosures for Investors Act in this package.

Mr. Chair, I yield 3 minutes to the gentleman from New York (Mr. Meeks), the co-lead of this bill and my very good friend here in Congress.

Mr. Chair, I yield an additional 30 seconds to the gentleman from New York.

Mr. Chair, I yield 2 minutes to the gentleman from Wisconsin (Mr. Steil), the sponsor of the Expanding WKSI Eligibility Act in this package.

Mr. Chair, I yield 1 minute to the gentleman from Nebraska (Mr. Flood), the sponsor of the Equal Opportunity for All Investors Act in this package.

Mr. Chair, I yield an additional 30 seconds to the gentleman from Nebraska.

Mr. Chair, I yield 2 minutes to the gentleman from Iowa (Mr. Nunn), my good friend and the sponsor of the ELEVATE Act in this package.

Mr. Chair, I yield myself such time as I may consume.

Mr. Chair, I also would like to pull up a few more of the organizations supporting the INVEST Act of our 81 total that we have received to date: the American Council of Life Insurers, the American Heart Association, the American Retirement Association, the Association of Women's Business Centers, Habitat for Humanity, the Lutheran Services in America, even Meals on Wheels America.

Mr. Chairman, I yield 2 minutes to the gentleman from Florida (Mr. Haridopolos), a sponsor of the Greenlighting Growth Act in this package.

Mr. Chair, I yield 1 minute to the gentleman from North Carolina (Mr. McDowell).

Mr. Chair, I yield myself the balance of my time.

Mr. Chair, in closing, I ask every American to talk to their parents and to their grandparents. Talk to the 81 groups supporting this piece of incredible legislation including the INVEST Act, most especially the American Retirement Association; Lutheran Services in America; Meals on Wheels; MissionSquare Retirement; the Small Business and Entrepreneurship Council; the United Way; the U.S. Black Chambers, Inc.; the U.S. Chamber of Commerce; and the YMCA. Why are they signing onto and supporting this tremendous piece of legislation?

Mr. Chair, I want to address the statements of the ranking member. A few of the statements about the INVEST Act are simply incorrect, and I want to set the record straight.

The ranking member claims that this bill creates a loophole for bad actors to sell, as we just spoke about, the retirees' products outside of government oversight and regulations. The collective investment trusts are overseen and regulated by the OCC and other Federal or State banking regulators, the IRS, and the Department of Labor.

In addition, investors have additional protections under the bill by requiring either the plan to be subject to ERISA protections, the employer sponsor to serve as a plan fiduciary, or a government plan subject to additional State protections.

The ranking member claims that this bill would make it harder for investors to receive disclosures. That is just simply and categorically untrue. The INVEST Act requires an initial paper communication, a transition period, annual paper reminders of the right to opt out, mechanisms to detect failed deliveries, and readability retention standards. Plus, there is standing anytime to opt out back to paper.

It modernizes disclosures in line with recent actions by the Thrift Savings Plan, TSP, while preserving protections for low-tech, low- income, and older investors.

The ranking member claims that this bill will turn closed-end funds into a vehicle for private funds to add unlimited amounts of risky private assets to everyday investors. That is categorically false. This provision does not change the strong regulatory obligations for both closed-end funds and their advisers under the securities law.

These protections include robust requirements with respect to fiduciary obligations, liquidity, transparency, valuation, and disclosure on fees, risks, strategies, and costs.

Mr. Chair, this bill is simply a bipartisan, targeted approach to modernizing outdated rules and expanding access to capital, while preserving strong investor protections. We have an opportunity today to unleash innovation and opportunity in every community we represent, putting more money in the pockets of our constituents and making life more affordable. That means more opportunities for workers, for savers, and for entrepreneurs.

The INVEST Act opens the door for everyone to share in the wealth of America, not just Wall Street.

Mr. Chair, I urge a ``yes'' vote so Congress can invest in our community, invest in our jobs, and invest for our future. I thank my colleagues on both sides of the aisle, again, for their very hard work and support

Mr. Chair, I yield back the balance of my time.

Mr. Chairman, I rise in respectful opposition to this amendment which would remove an important provision from the INVEST Act. Section 307 is not new or untested policy. This exact language passed the House floor earlier this Congress as H.R. 3357, the Enhancing Multi-Class Share Disclosure Act, with overwhelming bipartisan support.

Multi-class share structures date back to the late 1800s and were first conceived to allow companies, particularly family enterprises, to maintain control over voting decisions even without holding a majority of shares. These structures have become increasingly common, particularly among newer public companies.

Currently the SEC does not require the company to disclose the disparity between an individual's equity ownership and their controlling or controlled voting shares, though many companies already voluntarily provide this information.

Section 307 simply standardizes the information shareholders receive in proxy materials by requiring this information be provided in a consistent manner when it comes to voting power, particularly from the officers, directors, and those with more than a 5 percent stake.

This is a thoughtful, balanced approach. It enhances transparency for retail investors while preserving multi-class structures as a mechanism to encourage founders to go public. We are not banning these structures. We are simply ensuring investors understand what they are buying before they invest.

Enhanced disclosures protect retail investors who may not have the resources or expertise to navigate complex corporate structures. It levels the playing field by providing the same information to all market participants.

Given the strong bipartisan support, Mr. Chair, this provision has already received, I respectfully urge my colleagues to oppose this amendment and retain section 307.

Mr. Chair, I thank the gentleman for yielding.

I rise in support of the gentleman from Texas' amendment. This is a commonsense clarification that ensures section 105 cannot be misinterpreted as a blank check for expanding the Federal bureaucracy.

The INVEST Act is about modernizing our capital markets and expanding opportunities for investors and entrepreneurs, not about growing government.

This amendment provides helpful statutory clarity that protects taxpayers while preserving the important work this legislation accomplishes. I thank the gentleman from Texas for his amendment, and I urge my colleagues to support it.

Mr. Chair, I claim the time in opposition.

Mr. Chair, I rise in opposition to this amendment, which would impose sweeping new regulatory requirements on investment advisers and hedge funds serving foreign clients.

While combating illicit finance and addressing national security threats are critical objectives we all share, this amendment takes the wrong approach, one that FinCEN itself recognized as flawed.

Let's be clear about what happened. The Financial Crimes Enforcement Network, FinCEN, proposed a substantially similar rule and then postponed it before implementation. That postponement wasn't arbitrary. It came after careful consideration of the rules, operational challenges, compliance burdens, and questions about its effectiveness.

This amendment would impose requirements that even the agency charged with combating financial crimes determined needed further review. Investment advisers are already subject to robust oversight under the Investment Advisers Act of 1940. They owe a fiduciary duty to their clients and must comply with comprehensive Federal securities laws and regulations.

The SEC has extensive authority to examine advisers and enforce compliance. Moreover, imposing duplicative know-your-customer and anti- money laundering requirements specifically on foreign clients creates a two-tiered system that could harm U.S. competitiveness and global capital markets. International investors would face additional barriers when working with American advisers, potentially driving capital and business relationships to foreign jurisdictions with less stringent oversight.

If we believe gaps exist in our anti-money laundering framework, the solution is thoughtful, coordinated rulemaking by the appropriate agencies, not legislating requirements that are still under active consideration by FinCEN.

I urge my colleagues to reject this amendment and allow our Financial Crimes Enforcement Network to develop effective, practical solutions rather than imposing requirements they themselves abandoned.

Mr. Chair, I reserve the balance of my time.

Mr. Chair, I am prepared to close.

Mr. Chair, has the gentlewoman-- The Acting CHAIR. The gentlewoman from California is recognized.

Okay.

I would ask the Chair who is closing first: the gentlewoman from California (Ms. Waters) or myself?

Thank you, Mr. Chair.

Mr. Chairman, I rise one more time in closing to oppose this amendment by Ms. Garcia that requires investment advisers and hedge funds to perform know-your-customer verifications and implement anti-money laundering procedures for foreign clients. It is a sweeping new regulatory requirement on investment advisers and hedge funds that serve foreign clients.

Mr. Chair, I will be clear here that if we believe that any kind of gaps exist in our anti-money laundering frame, the solution that we have is thoughtful, coordinated rulemaking by the appropriate agencies. Obviously, FinCEN is still actively considering how to move forward.

Mr. Chair, I urge my colleagues to oppose this amendment, and I yield back the balance of my time.

Mr. Chair, I rise in opposition to the amendment.

Mr. Chairman, I rise in strong opposition to this amendment, which would pose a significant obstacle for the same small businesses and startups that we aim to support.

These proposed new requirements would act as a speed bump for smaller issuers. These are not massive Wall Street institutions. These are often first-time founders, small businesses, and innovative startups relying on 506(c) to raise essential seed and growth capital. Adding complex or ambiguous new filing requirements diverts their precious time and scarce resources away from innovation and job creation and toward burdensome compliance.

These additional disclosure burdens will actively discourage the startups and small businesses that desperately need access to this private market capital. They will choose to forgo fundraising altogether rather than navigate this complex, costly, and legally risky environment.

In fact, the Securities and Exchange Commission has examined similar ideas twice in the last decade. In both instances, the market response was a resounding chorus of concern. In both cases, the message was clear: New filing or disclosure obligations would significantly raise costs and ultimately chill early-stage capital formation.

We should be focused on expanding opportunities for American entrepreneurs, not erecting new bureaucratic barriers. We must prioritize a system that makes it easier and not harder for startups and small businesses to secure the capital that they need to grow, hire, and innovate.

Mr. Chair, I urge my colleagues to reject these unnecessary and harmful reporting burdens. I urge a ``no'' vote on this amendment, and I reserve the balance of my time.

Mr. Chairman, I yield 2 minutes to the gentleman from Pennsylvania (Mr. Meuser), the sponsor of the ACCESS Act in this package.

Mr. Chairman, I simply urge my colleagues to reject these unnecessary and harmful reporting burdens, and I ask that they oppose this amendment. I yield back the balance of my time.

Mr. Chairman, I claim the time in opposition.

Mr. Chairman, I rise in strong opposition to this amendment, which represents a fundamental departure from the careful, deliberative process that has guided the INVEST Act.

Let me be clear about what we are being asked to consider. This is not a modest technical correction or a narrow clarification. These are sweeping, complex changes that redefine fee structures across the entire securities industry. They create new prohibitions, and they establish an unprecedented public ranking system for SEC registrants.

It has never been vetted by participants, investor groups, legal experts, or Congress. It has not even been considered or marked up through the Financial Services Committee through regular order, the very process that every other provision in the INVEST Act has undergone.

We are being asked to inject unexamined policy into a carefully crafted bill at the 11th hour. This is not how we should legislate, particularly on matters affecting trillions of dollars in American retirement savings and investment accounts.

Beyond the procedural concerns, the policy itself is deeply flawed. SEC-registered advisers and broker-dealers are already subject to comprehensive fee disclosure requirements under existing law. They must provide clear, written disclosures about all fees and compensation. They are subject to fiduciary duties or Regulation Best Interest standards that require fees to be reasonable and in clients' best interests.

This amendment creates vague, undefined standards about what constitutes

a fee that is ``not proportional to services provided.'' Who decides proportionality? By what standard? This invites endless litigation and regulatory uncertainty that will ultimately harm investors by increasing costs and limiting service offerings.

I urge my colleagues to reject this substantively flawed amendment, and I reserve the balance of my time.

Mr. Chair, as we come to a close on what I believe is the final amendment of H.R. 3383, the INVEST Act, I thank my colleagues who have been so bipartisan in this package of 22 amazing capital formation bills that are going to lift up retail and mainstream investors, that are going to grow small business and entrepreneurs, and give more companies the possibility of having the capital for them to go public.

Mr. Chair, I thank my wonderful co-lead, Mr. Gregory Meeks from New York and Josh Gottheimer, and also Chairman Hill for their tremendous support in this effort and my entire Capital Markets Subcommittee, the staff, and the team that has brought what is years and years of hard work together that is going to grow this economy, grow jobs, and grow the future of the United States of America and our economy.

Mr. Chair, I thank the ranking member for the good, healthy debate this evening and the collaboration that we have, but I must say still, Mr. Chair, I urge my colleagues to reject this specific amendment, and I yield back the balance of my time.

Mr. Chair, I move that the Committee do now rise.

Mr. Chair, I rise today in support of the Access to Small Business Investor Capital Act, Section 302 of H.R. 3383 the Increasing Investor Opportunities Act or the INVEST Act. Section 302 of the INVEST Act is identical to my bill H.R. 2225 the Access to Small Business Investor Capital Act, which passed the House of Representatives in June. I want to first thank Ranking Member Waters for her tireless work to protect investors as well as Chairman Hill and Chairwoman Wagner for including my bill in this larger capital markets package. I also want to thank Reps. Huizenga, Bynum, and Garbarino for joining me as co-leads on this important piece of legislation.

The bipartisan Access to Small Business Investor Capital Act makes a narrow technical correction to a federal securities rule that has had major unintended consequences over the last two decades.

In 1980, Congress created Business Development Companies (BDCs) to facilitate capital formation into small and medium-sized businesses. BDCs provide both investment capital and management assistance to growing businesses that are often underserved by traditional lending institutions. By law, BDCs must invest at least 70 percent of their assets in small and mid-sized domestic companies.

Over time, BDCs have filled a crucial gap in our economy by funding businesses in industries and geographies often overlooked by other financial institutions. BDCs are often the first institutional investors to step in. Despite this success, a 2006 SEC rule has inadvertently discouraged capital flows into BDCs, constraining their ability to serve small businesses. The rule--part of the SEC's Acquired Fund Fees and Expenses (AFFE) disclosure framework--requires mutual funds and other investment vehicles that invest in BDCs to disclose the management fees, expenses, and AFFE of the BDC itself.

This has the effect of double-counting BDC expenses, because BDC costs are already factored into their share price and returns. By adding them again as acquired fund fees, the SEC rule artificially inflates the expense ratios of funds holding BDCs.

The result is misleading: investors see a fund's expenses as higher than they actually are, simply because it invests in BDCs. This perception has led many fund managers to exclude BDCs from their portfolios, not because of performance, but because of distorted regulatory accounting.

The intent of the rule--to provide transparency--was well-meaning. But the execution, particularly when applied to BDCs, has proven counterproductive. Research by U.S. and international finance professors shows that after BDCs were removed from major U.S. stock indexes--a consequence of the AFFE rule--BDCs experienced 29 percent to 33 percent lower investment growth compared to peers. The effects were not limited to the financial sector: companies that relied on BDC capital saw lower job creation, with employment growth falling by 1.5 to 6.4 percentage points compared to pre-exclusion levels.

The rule also fails to recognize the unique structure and mission of BDCs. Unlike passive funds, BDCs are actively managed and intentionally incur higher costs to provide tailored investment and advisory services to small businesses. This model creates long-term value, but the AFFE rule unfairly penalizes it. This is similar to the model of a REIT or bank, which the SEC AFFE rule excluded.

If the SEC had the benefit of hindsight--of knowing the capital formation and job creation losses that followed this rule--it's likely that BDCs would have been carved out of the AFFE framework from the start similar to REITs and banks. That is why Congress must act now to reverse this unintended consequence.

Section 302, the Access to Small Business Investor Capital Act fixes this by allowing funds to omit a BDC's ``acquired fund fees and expenses'' from disclosures while still maintaining transparency around the BDC's management fees and costs. This restores fairness in the treatment of BDCs, aligns regulatory disclosures with economic reality, and gives investors a clear view of true costs.

Importantly, it does so without rolling back investor protections or weakening existing SEC oversight.

This bipartisan legislation will open the door for more investment in BDCs, thereby unlocking more capital for small and mid-sized businesses across the country. The most important thing that our financial institutions and capital markets do is provide capital for businesses, particularly small, medium-sized, and growing enterprises.

Business Development Companies play a vital role in meeting this need, and I'm proud to work with a bipartisan group of Members to remove an outdated and unnecessary regulatory barrier.

Finally, the Access to Small Business Investor Capital Act seeks to resolve the AFFE issue with BDCs being removed from indices by eliminating the double counting of fees and, consistent with this intent, it is expected that comparable 1940 Act funds--such as interval and tender-offer funds--would also receive identical AFFE treatment.

The Access to Small Business Investor Capital Act passed the Financial Services Committee and this House once before, and I am glad that it was included in the INVEST Act.

Mr. Chairman, I have an amendment at the desk.

Mr. Chairman, I rise in support of my amendment to H.R. 3383 to strike section 307.

Section 307 directs the SEC to issue new rules forcing issuers with multi-class share structures to include prescribed ownership and voting-power disclosures in annual-meeting proxy or consent materials, and potentially other filings.

That is statutory micromanagement and another compliance mandate. More fundamentally, Washington should not be holding investors' hands. The key facts about control and voting rights are already available to the market through public filings and governing documents, and investors can decide for themselves whether they want to buy into a multi-class structure.

My amendment keeps this package focused on capital formation and avoids turning it into another paperwork bill.

Mr. Chairman, I urge adoption, and I reserve the balance of my time.

I say, again, Mr. Chairman, the information that she is referencing is already readily discoverable by investors, and they have the choice whether or not they want to invest in a multi-class structure.

I will tell you, Mr. Chair, this section 307 specifically targets directors, director nominees, named executive officers, and any holder with 5 percent or more of total combined voting power. It requires their share ownership and voter power to be expressed as percentages.

Mr. Chairman, investors are not children. The Federal Government should not be in the business of holding investors' hands over congressionally mandated proxy script disclosures. This section turns a capital formation package into another compliance mandate by hardwiring a one-size-fits-all disclosure regime into statutes instead of letting the markets and existing disclosures do their jobs.

Striking section 307 keeps the INVEST Act focused on expanding opportunity and liquidity rather than adding a new paperwork burden for public companies. If the goal of this bill is to increase investor opportunities and expand public markets, then Congress should be cutting friction, not adding a new compliance hook that falls on public companies and ultimately on shareholders.

Mr. Chairman, I reserve the balance of my time.

Mr. Chair, as the chairwoman referenced, organizations that want to do this are already doing it voluntarily. We should not add micromanagement to it.

Mr. Chair, I urge adoption of this amendment, and I yield back the balance of my time.

Mr. Chairman, I demand a recorded vote.

Mr. Chair, I have an amendment at the desk.

Mr. Chair, I rise in support of my amendment of H.R. 3383, the INVEST Act.

Section 105 creates offices of small business within key SEC divisions to coordinate on capital formation priorities. My amendment makes one commonsense clarification. It says this subsection may not be construed to authorize expenditures for additional full-time equivalent employees.

In other words, if the SEC wants better coordination for small businesses, it should do so with existing resources, not by treating this bill as a blank check for new hires. This keeps the policy goal intact while protecting taxpayers.

I urge adoption, and I reserve the balance of my time.

Mr. Chair, I yield to the gentlewoman from Missouri (Mrs. Wagner).

Mr. Chair, I will point out that those words are dangerous words, ``do what we can,'' because normally that means we are going to spend a lot more money. Congress, in this case, should not accidentally write an open-ended staffing authorization into statute just because we want better cooperation. This is a narrow, practical guardrail that keeps the INVEST Act focused on capital formation instead of quietly growing bureaucracy.

Mr. Chair, I yield back the balance of my time.

Mr. Chair, I thank Chairwoman Wagner, Chairman French Hill, Mr. Gottheimer, and to my dear friend and person that I respect and admire, the Ranking Member Maxine Waters, for their leadership.

Mr. Chair, I am here today to say why I support this bill and why it was important for me to be a cosponsor.

I support this bill because I believe it is a meaningful step for working families. At a time when families continue to feel the pressures of rising costs and financial uncertainty, the INVEST Act represents a meaningful, commonsense step to help Americans secure their financial futures.

Mr. Chair, 62 percent of Americans are invested in the stock market and the vast majority are not day traders or wealthy investors. There are millions of everyday workers who participate through mutual funds, pensions, and retirement plans like the 401(k)'s and IRAs.

I support this bill because it expands access to capital for underserved and under-networked entrepreneurs. This bill modernizes outdated rules that have made it especially hard for Black and Brown founders and minority-owned small businesses to meet investors, to participate in community investment events, and raise early capital.

The INVEST Act broadens who can responsibly participate in private markets. It preserves investor protections and strengthens oversight while recognizing that these opportunities for wealth building shouldn't just be for the super rich. It makes it easier for small businesses by reducing regulatory friction and compliance burdens that disproportionately impact them.

This package of 22 bills is fundamentally really a pro small business bill focused on addressing the affordability crisis and not a Wall Street deregulatory bill.

Mr. Chair, 16 of these bills have passed the House nearly unanimously in this Congress, and I supported every individual bill when we considered them before the Financial Services Committee, as did many of my committee colleagues.

I sponsored three of the bills in this package that I have worked on for multiple Congresses. These bills increase transparency in multiclass stock structures, protect against activist investors in closed-end funds, and encourage startups to test the waters when considering an IPO.

These issues aren't just a flash in the pan. These bills have come together after long thought and deliberation with partners like the U.S. Black Chambers, like minority banks, institutional investor advocates, and nonprofits. They are about closing the wealth gap of which I have been focused on my entire career.

That is why I support this bill. That is one of the main reasons why I am here in the United States Congress.

Strengthening our capital markets is not about helping the big guys. It is about improving the financial security of working families. Supporting the INVEST Act will give Americans more opportunities to grow their retirement savings and build long-term economic stability.

Mr. Chair, I support this bill and urge my colleagues to do the same.