Expanding Access to Capital Act of 2023

Floor Speech

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Ms. VELAZQUEZ. Mr. Chairman, I rise in opposition to H.R. 2799.

As ranking member of the House Small Business Committee, I know that small businesses are the driving force of the American economy. Access to capital is the lifeblood of our Nation's small firms. It is what allows them to expand and hire more workers.

A key method for small businesses to raise capital is seeking investors through our Nation's capital markets. It is a method I support. However, raising funds through capital markets cannot come at the expense of retail investors, employees, and independent contractors. This bill fails to strike an appropriate balance and significantly weakens investor protections while dramatically expanding the number of exempt offerings.

When we created new exemptions in the JOBS Act, they were designed for smaller firms. Today, large private companies and private equity funds have misused these exemptions to create an opaque lending market that is now bigger than our public markets. The lack of transparency associated with these funds isn't beneficial for small businesses seeking financing from these funds or retail investors investing in them.

Private securities offerings are generally deemed as riskier than public offerings. The lack of disclosures and transparency in this bill allows retail investors to participate in these offerings without adequately understanding the dangers, creating the potential for significant financial loss for working-class investors and retirees.

President Biden has already signaled his opposition to this bill. If the majority were serious about helping small businesses raise capital through our private markets, they would pull this bill and work with us to craft a bipartisan solution that helps small businesses and protects investors.

Mr. Chair, I encourage my colleagues to vote ``no.''

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