Increasing Investor Opportunities Act
Floor Speech
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Mrs. WAGNER. 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are locked out of opportunities just because they aren't wealthy enough, and emerging fund managers who confirmed that outdated rules are holding America back.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.
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Mrs. WAGNER. 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
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Mrs. WAGNER. 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.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. Mr. Chair, I yield an additional 30 seconds to the gentleman from New York.
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Mrs. WAGNER. Mr. Chair, I yield 2 minutes to the gentleman from Wisconsin (Mr. Steil), the sponsor of the Expanding WKSI Eligibility Act in this package.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. Mr. Chair, I yield an additional 30 seconds to the gentleman from Nebraska.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. Mr. Chair, I yield 1 minute to the gentleman from North Carolina (Mr. McDowell).
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Mrs. WAGNER. 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.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. Mr. Chair, I claim the time in opposition.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. Mr. Chair, I am prepared to close.
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Mrs. WAGNER. Mr. Chair, has the gentlewoman-- The Acting CHAIR. The gentlewoman from California is recognized.
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Mrs. WAGNER. Okay.
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Mrs. WAGNER. I would ask the Chair who is closing first: the gentlewoman from California (Ms. Waters) or myself?
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Mrs. WAGNER. Thank you, Mr. Chair.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. Mr. Chair, I rise in opposition to the amendment.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. Mr. Chairman, I yield 2 minutes to the gentleman from Pennsylvania (Mr. Meuser), the sponsor of the ACCESS Act in this package.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. Mr. Chairman, I claim the time in opposition.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. 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.
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Mrs. WAGNER. Mr. Chair, I move that the Committee do now rise.
The motion was agreed to.
Accordingly, the Committee rose; and the Speaker pro tempore (Mr. Mackenzie) having assumed the chair, Mr. Wied, Acting Chair of the Committee of the Whole House on the state of the Union, reported that that Committee, having had under consideration the bill (H.R. 3383) to amend the Investment Company Act of 1940 with respect to the authority of closed-end companies to invest in private funds, had come to no resolution thereon.
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