Expanding Access to Capital Act of 2023

Floor Speech

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Mrs. WAGNER. Madam Chair, I claim the time in opposition, and I am indeed opposed to this amendment.

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Mrs. WAGNER. Madam Chair, Republicans agree that the failure of Silicon Valley Bank and other institutions last March should be studied to better understand their impact on lending and community banks. That is why the Financial Services Committee devoted much of last spring and summer to holding a series of bipartisan hearings to better understand the bank failures and their consequences. We also advanced a package of legislation in response to the bank failures.

However, studies about lending and community banks should be done by banking regulators. Such a study is far outside the expertise of the SEC and especially the Advocate for Small Business Capital Formation.

H.R. 2799 does not include a study on banking services for venture funds. However, the focus of our study is to better understand venture capital and the potential obstacles preventing their growth or hindering their ability to serve the entrepreneurs they invest in, especially for smaller venture funds outside of major financial hubs.

The study required by this amendment is materially different. The SEC is very experienced in regulating and studying venture funds, but bank lending and community banks are far outside the SEC's remit.

While I appreciate my colleague's interest in better understanding the implications of the bank failures on lending, this is not the proper package for this amendment.

For those reasons, I urge my colleagues to reject this amendment and support the underlying legislation.

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

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Mrs. WAGNER. Madam Chair, I claim the time in opposition to this amendment.

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Mrs. WAGNER. Madam Chair, I rise in opposition to the amendment offered by the gentlewoman from Michigan.

Not only is this amendment problematic, but as drafted, it is also unenforceable. Nowhere in Federal law is the term ``junk fees'' defined--not in our securities laws and not in this amendment.

I know the Biden administration's financial regulators like to create new terms to advance the President's political agenda, but we shouldn't be making up new terms without defining them here in Congress.

The companies impacted by this amendment would be equally in the dark.

How can a company know if a given fee is so-called junk when neither the SEC nor the amendment can define it?

Should they just charge no fees at all, potentially putting some firm out of business?

The only fees Democrats seem to want to spare from this political crusade are those charged by the government itself. For example, the IRS charges fees to folks who pay their taxes late. I get it. No one wants to pay fees, but charging fees for a product or service is a normal part of doing business.

Madam Chair, I urge my colleagues to oppose this amendment, and I reserve the balance of my time.

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Mrs. WAGNER. Madam Chair, may I inquire how much time I have remaining.

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Mrs. WAGNER. Madam Chair, I just want to reiterate my opposition to this amendment.

As I said, the only fees Democrats seem to want to spare from the political crusade are those charged by the government itself. As I said, the Internal Revenue Service charges fees to folks who pay their taxes late.

There is no definition of junk fee anywhere in here.

I would also like to point out to the gentlewoman from Michigan that I was a sponsor of the Families Fly Together Act which did away with additional fees for children who are accompanied by their parents on a plane. Those children get to fly free with their parents. That was my piece of legislation. It is called Families Fly Together. It was in the base legislation of the Federal Aviation Administration reauthorization, and it passed this U.S. House Chamber without the gentlewoman from Michigan's support.

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

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Mrs. WAGNER. Madam Chair, I rise in opposition to the amendment.

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Mrs. WAGNER. Madam Chair, I appreciate the gentleman's concern about fraud in our financial system--it is a serious problem that impacts far too many Americans. However, his intent in offering this unnecessary and unworkable amendment seems to be to ensure this bill never takes effect.

This amendment would provide State regulators and unelected bureaucrats with veto power over duly passed laws. That should concern everyone in this Chamber.

Let's dig into this.

First, the amendment is unnecessary. The Federal securities laws already include broad antifraud provisions that are designed to protect investors. The same provisions offer recourse against those who have engaged in security fraud.

The Federal securities laws also include bad actor disqualifications that prevent fraudsters from benefiting from certain privileges offered under the securities laws.

To be clear, nothing in the Expanding Access to Capital Act would modify, remove, or limit the securities laws' antifraud or bad actor provisions in any way, period.

Second, the amendment is entirely unworkable. For example, the amendment broadly states the SEC must ``consult with State security regulators.''

All States? Certain States?

If so, who decides which States?

Can one State block the law from taking effect?

Congress does not need approval from the executive branch agencies and State regulators to do its job.

Let's be serious. Fewer companies are entering our public markets than at any time in recent history, and the current SEC is ignoring its statutory mandate to facilitate capital formation.

Congress has an obligation to make law to address these glaring issues. I would welcome my Democratic colleagues to join Republicans in our efforts to help small businesses, entrepreneurs, and investors by supporting H.R. 2799.

Announcement by the Acting Chair

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Mrs. WAGNER. Madam Chair, may I inquire how much time I have remaining.

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Mrs. WAGNER. Madam Chair, I would mention to my good friend, my colleague, Mr. Lynch, that the preemption clauses were struck in the manager's amendment. I do certainly appreciate the gentleman's concern about fraud in our financial system. However, his intent in offering this very unnecessary and unworkable amendment seems to be to ensure this bill never takes effect.

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

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Mrs. WAGNER. Madam Chair, I claim the time in opposition as I am opposed to this amendment.

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Mrs. WAGNER. Madam Chair, I rise in opposition to the amendment offered by the ranking member. This amendment is problematic on several fronts.

First, it is an attempt to impose more onerous disclosure requirements on actors in the private markets than what exists in the public markets. Doing so would be unprecedented, even for an overzealous regulator.

For decades, our security laws have intentionally featured vastly different disclosure requirements between our public markets and our private markets. This amendment would destroy that intentional distinction by mandating an unworkable disclosure regime on private funds that is more onerous than what is required of any public company.

The public disclosure of the type of information required by this amendment could be weaponized by activists to name and shame market participants for pursuing an investment strategy that may not be politically favorable to the progressive left.

This would be counterproductive and against the spirit of the securities laws, which are not intended to encourage investments in any one sector or type of business.

The increased compliance costs resulting from this amendment would disproportionately hurt smaller emerging funds, advisers, and investment companies, many of which are minority owned, women owned, veteran owned, and rural.

If Democrats are serious about wanting to help underserved communities thrive, they will oppose this amendment. Instead, they should support the underlying bill, which would help Americans from all walks of life realize their version of the American Dream.

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Mrs. WAGNER. Madam Chair, if Democrats are serious about wanting to help underserved communities thrive, they will oppose this amendment. Instead, they should support the underlying bill, which will help Americans from all walks of life realize their version of the American Dream.

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

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