House Financial Services Committee Reviews Legislation on Capital Formation

The House Financial Services Committee reviewed multiple legislative proposals on capital formation. The Committee also considered a set of bills to reform the CFPB.

At a markup meeting, the House Financial Services Committee considered, among others, the following bills:

• H.R. 835, the Fair Investment Opportunities for Professional Experts Act, which would expand the definition of "accredited investor" to include individuals with certain licenses, qualifying education or job experience as determined through SEC rulemaking and verified by FINRA;
• H.R. 1579, the Accredited Investor Definition Review Act, which would require the SEC to, every five years, (i) review the list of qualifying credentials and certifications for individuals to qualify as "accredited investors," and (ii) add any additional certifications deemed "substantially similar";
• H.R. 2793, the Encouraging Public Offerings Act of 2023, which would, among other things, codify Securities Act Rule 163B by allowing issuer communication with potential investors regarding the investor’s interest in a securities offering either before or after filing a registration statement;
• H.R. 2610, which would amend the emerging growth company ("EGC") financial statement requirements under the Exchange Act, to allow an EGC to present two years', instead of three years', worth of audited financial statements regarding IPOs and spin-off transactions;
• H.R. 1807, the Improving Disclosure for Investors Act of 2023, which would direct the SEC to pass new rules allowing registrants to deliver regulatory documents to investors electronically;
• H.R. 2795, the Enhancing Multi-Class Share Disclosures Act, which would implement additional disclosure requirements for issuers with multi-class stock structure in any proxy or consent solicitation material;
• H.R. 2593, the Senior Security Act, which would direct the SEC to create the Senior Investor Taskforce and report on topics concerning investors over the age of 65;

The Committee also considered:

• H.R. 2798, the CFPB Transparency and Accountability Reform Act, which is a comprised of seven bills aimed at making the CFPB "more transparent and accountable" to Congress by (i) implementing a a five-member leadership commission, (ii) bringing the CFPB within the "regular" appropriations process, (iii) designating a CFPB Inspector General, (iv) requiring a cost-benefit analysis be submitted with all regulatory actions taken by the CFPB, in addition to considering the impact on small businesses, and (v) creating a framework for providing monetary rewards for whistleblowers.

House Financial Services Committee Chair Patrick McHenry (R-NC) said H.R. 2798 would ensure that the CFPB is "finally accountable to Congress and the American people."