Conference Report on H.R. 4173, Dodd-Frank Wall Street Reform and Consumer Protection Act - Extension of Remarks

Floor Speech

Ms. ESHOO. Mr. Speaker, I rise to highlight the critical role of venture capital in creating jobs and growing companies. Specifically, I would like to raise the issue of the Volcker Rule and the unintended effect it may have on this type of investment.

I strongly support and will vote for H.R. 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the inclusion of a strong and effective Volcker Rule.

The purpose of the Volcker Rule is to eliminate risk-taking activities by banks and their affiliates while at the same time preserving safe, sound investment activities that serve the public interest. We have specifically barred bank investment in hedge funds and private equity for that reason.

Venture capital funds do not pose the same risk to the health of the financial system. They promote the public interest by funding growing companies critical to spurring innovation, job creation, and economic competitiveness. The funds typically invest primarily or exclusively in private companies and are significantly smaller.

I expect the regulators to use the broad authority in the Volcker Rule wisely and clarify that funds that invest in technology startup companies, such as venture capital funds, are not captured under the Volcker Rule and fall outside the definition of "private equity funds''.

This clarification will ensure the Dodd-Frank Wall Street Reform and Consumer Protection Act does not stop venture capital from providing a critical source of capital for startup technology companies.

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