House passes bipartisan bill to boost business investment

The House on Tuesday passed a bipartisan package of 32 bills intended make it cheaper and easier for small businesses and startups to access capital markets and woo investors.

Lawmakers voted almost unanimously to pass the JOBS and Investor Confidence Act one day after the leaders of the House Financial Services Committee announced a deal following months of markups and negotiations.

The package, named after the 2012 bill passed under former President Obama, contains several dozen bills focused on capital markets regulations, all of which passed the Financial Services panel or House with meager resistance.

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The deal also rolls back some Dodd-Frank Act banking rules with provisions that have also earned wide bipartisan support.

“This is going to be an important day for small business,” said Rep. Jeb Hensarling (R-Texas), chairman of the Financial Services Committee. “This is going to make a difference ultimately because small businesses will one day become big businesses.”

The House voted 406-4 pass the bill, with two Democrats and two Republicans opposing measure. The package is by far the most comprehensive financial regulatory relief to earn wide support from House Democrats, who have rejected several sweeping attempts to loosen Dodd-Frank.

Republicans pitched the bill as a crucial boost to lagging initial public offerings from U.S. businesses, while Democrats said the measure would help small firms hold their own against corporate behemoths.

Rep. Maxine Waters (Calif.), the Financial Services Committee’s top Democrat, called the bill “a carefully crafted bipartisan compromise” and “an example of members on both sides of the aisle working together to support our nation’s small businesses and investors.”

“This bill will help entrepreneurs, small businesses, investors and our economy to thrive,” Waters said.

The package now faces an uncertain future in the Senate. Hensarling has said that Senate leaders have promised to hold a vote on the House measure, but the bill would need support from 10 Senate Democrats to pass.

Hensarling secured a pledge from Senate leaders to take up the House deal when he promised to support the upper chamber’s bipartisan Dodd-Frank rollback, which President Trump signed in May.

Senate Majority Leader Mitch McConnell (R-Ky.) said in a statement, “Now that the House has passed their bipartisan legislation to improve access to capital for communities across the country as they grow and create jobs, Senators will continue their ongoing bipartisan discussions as we work towards a vote in the coming months.”

Muted support from the White House raised further questions about the bill’s future. Press secretary Sarah Huckabee Sanders said President Trump congratulated the House for passing the bill, but would seek “several technical and substantive changes to the legislation.” If the Senate amends the bill to satisfy the White House before passing it, the House would be forced to vote again on the measure amid a jam-packed schedule.

The capital markets deal is the Financial Services panel’s latest bipartisan accomplishment, following the successful passage of a bill to boost the powers of a secretive federal panel that reviews foreign investments.

Hensarling and Waters frequently battle over most financial regulatory issues, including the federal bank supervision powers of the Consumer Financial Protection Bureau.

But the staunchly conservative chairman and fiercely liberal ranking Democrat found common ground on more than two dozen proposals intended to ease burdens on burgeoning companies.

The duo heaped praise on each other in remarks on the House floor and poked fun at their frequent contentious showdowns while leading the Financial Services panel.

“Some would say the ranking member and I can’t even agree on the time of day,” Hensarling said of Waters. “We came together.”

Waters in turn praised Hensarling for having the “foresight” to see the makings of a deal that aligned with both parties’ interests.

“He provided that leadership,” Waters said. “There are many onlookers who never thought this would happen.”

One provision in the deal would create a new exchange for shares in small businesses and startups that are currently ineligible for public trading. Investors would only be able to trade shares of companies on the exchange during designated auctions, and the shares of listed firms would not be available for trading elsewhere.

The package also includes bills meant to give investors and businesses legal clarity about the types of interactions, meetings and proposals allowed under securities law.

Some provisions would update, clarify or raise several disclosure thresholds and qualifications in ways meant to expand the scope of businesses and investors that can hold or participate in certain stock offerings. Others seek to give companies considering a public offering more time and freedom to gauge investor interest.

The package avoids touching some of the most polarizing Dodd-Frank rules, but makes modest changes to some bank and lending regulations. The bill would allow large U.S. banks to submit “living wills” to regulators every two years instead of annually, and exempts nonbank financial institutions from federal stress tests.

The deal also includes measures to mandate reviews of current securities laws for inefficiencies, and establish new procedures to crack down on insider trading, financial fraud against senior citizens, money laundering and human trafficking.

–Updated at 7:09 p.m.