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Waters, Hensarling put forth massive bipartisan economic growth bill

Package composed of 32 individual legislative pieces

Chairman of the House Committee on Financial Services Jeb Hensarling, R-Texas, and the committee’s Ranking Member Maxine Waters, D-Calif., announced they reached an agreement on a package of bipartisan legislation to push economic growth.

The enormous bipartisan push for the legislative package, known as the JOBS and Investor Confidence Act of 2018, is made up of 32 individual pieces of legislation that have passed the committee or House this congressional session with broad bipartisan and sometimes even unanimous support.

“Over the last several months, our committee has been working hard to put forth a number of capital-formation bills that are designed to breathe new life into markets that are suffocating under aging regulations,” Hensarling said. “Thanks to the efforts of the ranking member and members of the committee on both sides of the aisle, we have a strong bipartisan package that will play an important role in sustaining long-term economic growth and global competitiveness.”

Waters explained that the legislation would provide a stronger economy, more jobs and strong investor protections.

“A stronger economy, more jobs for America’s families, and strong investor protections are top priorities for Committee Democrats,” she said. “I want to thank the chairman and the staff of the committee on both sides of the aisle for the work that they have been doing, working together to live up to what we always say—that we all support small businesses, their access to capital and protecting investors. This is true bipartisanship we are witnessing today.”

Some of the legislation includes clearing up rules, reducing regulation for smaller companies such as making different small banks exempt from federal stress tests or even orders for federal agencies to look further into the benefits of certain rules.

See the 32 individual pieces of legislation the bill includes, and when they passed either the House or the committee by clicking to page two below.

1. H.R. 79, Helping Angels Lead Our Startups Act – Passed in House with a margin of 344-73 on January 10, 2017.

Sponsored by Rep. Steve Chabot, R-Ohio, and co-sponsored by Rep. Kyrsten Sinema, D-Ariz., this bill defines an “angel investor group” and clarifies a regulation issued by the Securities and Exchange Commission to ensure that startups have the opportunity to make a presentation to interested parties without running afoul of the securities laws.

2. H.R. 435, The Credit Access and Inclusion Act of 2017 – Passed in House by voice vote on June 25, 2018.

Sponsored by Rep. Keith Ellison, D-Minn., and co-sponsored by Rep. Robert Pittenger, R-N.C., the bill amends the Fair Credit Reporting Act to authorize an entity, including the Department of Housing and Urban Development to furnish data to consumer reporting agencies regarding an individual’s history of on-time payments with respect to a lease, or contracts for utilities and telecommunications services.

3. H.R. 477, Small Business Mergers, Acquisitions, Sales and Brokerage Simplification Act of 2017 – Passed unanimously in House on December 7, 2017.

Sponsored by Rep. Bill Huizenga, R-Mich., and co-sponsored by Rep. Brian Higgins, D-N.Y., the bill alleviates costs to small business owners by simplifying the securities registration system for mergers and acquisition brokers who help transfer the ownership of small, privately held companies. It also disqualifies bad actors from utilizing the simplified process and does not allow transactions involving shell companies.

4. H.R. 1585, Fair Investment Opportunities for Professional Experts Act – Passed in House by voice vote on November 1, 2017.

Sponsored by Rep. David Schweikert, R-Ariz., co-sponsored by Rep. Carolyn Maloney, D-N.Y., and Sinema, and modified by an amendment in the nature of a substitute offered by Rep. French Hill, R-Ariz., the bill modernizes the definition of accredited investor so those who do not have a high income or high net worth but do have the education and job experience to evaluate investment risks and merits can participate in the growth of promising companies. This change will provide more Americans with greater investment opportunities and enable the businesses they invest in to create more jobs.

5. H.R. 1645, Fostering Innovation Act – Passed the committee with a margin of 48-12 on October 12, 2017.

Sponsored by Sinema and co-sponsored by Rep. Trey Hollingsworth, R-Ind., the act amends one section of the Sarbanes-Oxley Act to extend the exemption to comply with the law for certain low-revenue emerging growth companies that would otherwise lose their exempt status at the end of the five-year period that applies under current law.

6. H.R. 2219, End Banking for Human Traffickers Act of 2018 – Passed in House with a margin of 408-2 on April 10, 2018.

Sponsored by Rep. Ed Royce, R-Calif., and co-sponsored by Maloney, this bill amends the Victims of Trafficking and Violence Protection Act of 2000 to add the Treasury Secretary to the President’s Interagency Task Force to Monitor and Combat Trafficking; requires the task force to submit to Congress an analysis of anti-money laundering efforts of the U.S. government and financial institutions relating to severe forms of trafficking in persons; and requires the Treasury Secretary to designate an office within the Office of Terrorism and Financial Intelligence to coordinate efforts to combat the illicit financing of human trafficking.

7. H.R. 2364, Investing in Main Street Act – Passed in House by voice vote on July 24, 2017.

Sponsored by Rep. Judy Chu, D-Calif., and co-sponsored by Rep. Stephen Knight, R-Calif., the bill amends the Small Business Investment Act by increasing the percentage a financial institution or federal savings association can invest in a small business investment company to 15% and requires the financial institution or the federal savings association to be approved by their federal regulator prior to investing more than 5%.

8. H.R. 3555, Exchange Regulatory Improvement Act – Passed committee by voice vote on July 11, 2018.

Sponsored by Rep. Barry Loudermilk, R-Ga., and co-sponsored by Rep. Lee Zeldin, R-N.Y., Rep. Gregory Meeks, D-N.Y., and David Scott, D-Ga., the act, as amended, requires the SEC to set forth the facts and circumstances it considers in determining what is a facility of an exchange.

9. H.R. 3903, Encouraging Public Offerings Act of 2017 – Passed unanimously in House on November 1, 2017.

Sponsored by Rep. Ted Budd, R-N.C., and co-sponsored by Meeks, the act amends the Securities Act of 1933 to expand to all public companies certain provisions of Title I of the Jumpstart Our Business Startups Act, which previously applied only to an EGC. Specifically, the legislation allows issuers to submit to the SEC for confidential review before publicly filing draft registration statements for Initial Public Offerings and for follow-on offerings within one year of an IPO. This bill also allows all companies to test-the-waters before filing an IPO, which means they may meet with qualified institutional buyers and other institutional accredited investors to gauge those investors’ interest in the offering.

10. H.R. 3972, Family Office Technical Correction Act – Passed in House by voice vote on October 24, 2017.

Sponsored by Maloney, the bill clarifies that family offices and family clients, as defined in section 275.202(a)(11)(G)-1 of title 17, Code of Federal Regulations, are accredited investors under Regulation D of the SEC.

11. H.R. 4281, Expanding Access to Capital for Job Creators Act – Passed unanimously in committee on November 15, 2017.

Sponsored by Rep. Ruben Kihuen, D-Nev., and co-sponsored by Rep. Alex Mooney, R-W. Va., the act amends the Securities Exchange Act of 1934 to have the SEC’s Advocate for Small Business Capital Formation identify any unique challenges to rural area small businesses when identifying problems that small businesses have with securing access to capital. The bill also requires that the annual report made by the SEC’s Small Business Advocate include a summary of any unique issues encountered by rural area small businesses.

12. H.R. 4292, Financial Institution Living Will Improvement Act of 2017 – Passed unanimously in House on January 30, 2018.

Sponsored by Zeldin and co-sponsored by Maloney, the bill amends the Dodd-Frank Wall Street Reform and Consumer Protection Act to reform the resolution plan submission living will process by requiring bank holding companies to submit to the Federal Reserve and the Federal Deposit Insurance Corporation resolution plans every two years. This bill requires the Federal Reserve and FDIC to provide feedback regarding a resolution plan within six months after a bank holding company submission. This bill also requires the agencies to publicly disclose the assessment framework used to review the adequacy of resolution plans.

13. H.R. 4294, Prevention of Private Information Dissemination Act of 2017 – Passed in House with a margin of 392-2 on June 26, 2018.

Sponsored by Rep. David Kustoff, R-Tenn., the act establishes criminal penalties for the unauthorized disclosure of living will and stress test determinations and other individually identifiable information by federal officials, consistent with existing penalties for other unauthorized disclosure of confidential records by federal officials.

14. H.R. 4537, International Insurance Standards Act – Passed in House by voice vote on July 10, 2018.

Sponsored by Rep. Sean Duffy, R-Wis., and co-sponsored by Rep. Denny Heck, D-Wash., the bill ensures that international insurance standards and agreements are consistent with the U.S.’ domestic insurance system and provides greater congressional oversight and transparency on international insurance standard negotiations.

15. H.R. 4566, Alleviating Stress Test Burdens to Help Investors Act – Passed in House with a margin of 395-19 on March 20, 2018.

Sponsored by Rep. Bruce Poliquin, R-Maine, the section of this legislation to be included in JOBS Act 3.0 amends the Dodd-Frank Wall Street Reform and Consumer Protection Act to exempt nonbank financial institutions not primarily regulated by either a federal banking agency or the Federal Housing Finance Agency from the Dodd-Frank Act’s mandatory company-run stress-testing requirements. The bill also clarifies that the SEC and the Commodity Futures Trading Commission retain their authority to issue regulations to require nonbank financial companies to conduct periodic analysis of the financial condition of such companies under adverse economic conditions.

16. H.R. 4768, National Strategy for Combating the Financing of Transnational Criminal Organizations Act – Passed House by voice vote on March 6, 2018.

Sponsored by Kustoff and co-sponsored by Sinema, the bill requires the president, through the Secretary of the Treasury, to develop a national strategy to combat the financial networks of transnational criminal organizations not later than one year after the enactment of the act and every two years thereafter. In particular, the strategy will assess the most significant TCO threats and the individuals, entities, and networks that provide financial support or facilitation to those TCOs. It also reviews current goals, priorities and actions against TCOs’ financial support networks and will recommend new ways to deter and prosecute those who financially enable TCOs.

(Continued on page 3)

17. H.R. 5288, Common Sense Credit Union Capital Relief Act

Sponsored by Rep. Bill Posey, R-Fla., and co-sponsored by Heck, the bill delays the effective date of the rule used by the National Credit Union Administration titled Risk-Based Capital from 2019 to 2021.

18. H.R. 5749, Options Markets Stability Act – Passed unanimously in House on July 10, 2018.

Sponsored by Rep. Randy Hultgren, R-Ill., and co-sponsored by Rep. Bill Foster, D-Ill., the legislation requires the prudential regulators to implement a risk-adjusted approach to value centrally-cleared exchange-listed derivatives as it relates to capital rules to better and more accurately reflect exposure and to promote market-making activity.

19. H.R. 5783, Cooperate with Law Enforcement Agencies and Watch Act of 2018 – Passed in House with a margin of 379-4 on June 25, 2018.

Sponsored by Hill, and co-sponsored by Foster, the act provides a safe harbor for financial institutions that maintain a customer account at the request of a Federal, State, tribal or local law enforcement agency.

20. H.R. 5877, Main Street Growth Act – Passed in House by voice vote on July 10, 2018.

Sponsored by Rep. Tom Emmer, R-Minn., the act amends the Securities Exchange Act of 1934 to allow for the registration of venture exchanges with the SEC to provide a venue that is tailored to the needs of small and emerging companies and offers qualifying companies one venue in which their securities can trade.

21. H.R. 5953, Building Up Independent Lives and Dreams Act – Passed in House by voice vote on July 10, 2018.

Sponsored by Loudermilk and Rep. Brad Sherman, D-Calif., the bill allows certain non-profits that are conducting charitable mortgage loan transactions to use either the truth in lending, good faith estimate, and HUD-1 forms or those required under the TILA-RESPA Integrated Disclosure rule.

22. H.R. 5970, Modernizing Disclosures for Investors Act – Passed in House by voice vote on July 10, 2018.

Sponsored by Rep. Ann Wagner, R-Mo., the act requires the SEC to provide a report to Congress with a cost-benefit analysis of EGCs’ use of SEC Form 10-Q, including the costs and benefits to investors and other market participants of the current requirements for reporting on Form 10-Q, as well as the expected impact of the use of alternative formats of quarterly reporting for EGCs. The bill also directs the SEC to report to Congress with recommendations for decreasing costs, increasing transparency, and increasing efficiency of quarterly financial reporting by EGCs.

23. H.R. 6069, Fight Illicit Networks and Detect Trafficking Act – Passed in House by voice vote on June 25, 2018.

Sponsored by Rep. Juan Vargas, D-Calif., and co-sponsored by Rep. Keith Rothfus, R-Penn., the act requires the Comptroller General of the U.S. to carry out a study on how virtual currencies and online marketplaces are used to buy, sell or facilitate the financing of goods or services associated with sex trafficking or drug trafficking, and for other purposes.

24. H.R. 6139, Improving Investment Research for Small and Emerging Issuers Act – Passed in House by voice vote on July 10, 2018.

Sponsored by Huizenga and co-sponsored by Waters, the bill requires the SEC to carry out a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers and pre-IPO companies, including EGCs and other small issuers.

25. H.R. 6177, Developing and Empowering our Aspiring Leaders Act – Passed in committee by voice vote on July 11, 2018.

Sponsored by Hollingsworth, the act requires the SEC to revise the definition of a qualifying investment to include equity securities acquired in a secondary transaction.

26. H.R. 6319, Expanding Investment in Small Businesses Act – Passed in committee by voice vote on July 11, 2018.

Sponsored by Hultgren, the bill requires the SEC to study whether the current diversified fund limit threshold for mutual funds constrains their ability to take meaningful positions in small-cap companies.

27. H.R. 6320, Promoting Transparent Standards for Corporate Insiders Act – Passed in committee by voice vote on July 11, 2018.

Sponsored by Waters, the act requires the SEC to consider certain types of amendments to Rule 10b5-1 to ensure that corporate insiders are not able to indirectly engage in illegal insider trading through changes to their trading plans.

28. H.R. 6321, Investment Adviser Regulatory Flexibility Improvement Act – Passed in committee by voice vote on July 11, 2018.

Sponsored by Rep. Gwen Moore, D-Wis., and co-sponsored by Huizenga, the act directs the SEC to consider alternative methods for businesses or organizations to qualify as a “small business” or “small organization” for the purposes of assessing the regulatory impact on investment advisers.

29. H.R. 6322, Enhancing Multi-Class Share Disclosures Act – Passed the committee by voice vote on July 11, 2018.

Sponsored by Meeks, the bill requires issuers with a multi-class share structure to make certain disclosures in any proxy or consent solicitation material that provide enhanced transparency regarding certain shareholders’ voting power.

30. H.R. 6323, National Senior Investor Initiative Act of 2018 – Passed in committee by voice vote on July 11, 2018.

Sponsored by Rep. Josh Gottheimer, D-N.J., and co-sponsored by Hollingsworth, the act creates an interdivisional task force at the SEC, to examine and identify challenges facing senior investors and requires the Government Accountability Office to study the economic costs of the exploitation of senior citizens.

31. H.R. 6324, Middle Market IPO Underwriting Cost Act – Passed in committee by voice vote on July 11, 2018.

Sponsored by Himes, the act requires the SEC, in consultation with the Financial Industry Regulatory Authority, to study the direct and indirect costs associated with small and medium-sized companies to undertake initial public offerings.

32. H.R. 6380, Crowdfunding Amendments Act – Bill will be introduced on July 16, 2018.

To be sponsored by Rep. Patrick McHenry, R-N.C. and Waters, the bill allows crowdfunding investors to pool their money together into a fund that is advised by a registered investment adviser.

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