Expanding Access to Capital Act of 2023

Floor Speech

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Ms. McCOLLUM. Mr. Chair, I rise in opposition to H.R. 2799, the Expanding Access to Capital Act. Mr. Chair, this bill does not in fact expand access to capital. It expands access to fraud.

Historically, U.S. capital markets have been successful because of the transparency, accountability, and oversight required by regulations. Investors both here and abroad have confidence in the investments they make because they know companies are required to be transparent and the Securities and Exchange Commission (SEC) is obligated to perform oversight. However, large companies are now using exemptions designed for small businesses. This has resulted in an expansion of the private securities market, which is riskier than the public securities market because there are fewer and, in some cases, no disclosures required. H.R. 2799 would exacerbate these problems by allowing large companies to evade disclosure requirements and SEC oversight. The bill also reduces incentives for companies to go public through an initial public offering (IPO) which will deprive investors, including working families and retirees, of transparent investment opportunities.

Everyday Americans invest their hard-earned money to save for their education, travel, buying a home, and retirement. H.R. 2799 threatens the existing regulations that protect everyday Americans from risky investments that would put their livelihoods in jeopardy. Under current regulation, financial professionals or companies are required to only sell private securities to investors who have access to reliable information, have a demonstrated ability to understand the risks, and have the financial wherewithal to absorb potentially severe investment losses. H.R. 2799 removes these safeguards, allowing financial middlemen to peddle risky private securities to unsuspecting, hard- working Americans. H.R. 2799 sets everyday American investors up to fail.

H.R. 2799 also includes anti-worker provisions that will harm gig- workers like rideshare drivers, food delivery providers, and on-demand caregivers. The State of Minnesota has been working hard to prevent the misclassification of gig-workers workers as independent contractors and provide stronger protections for these workers. H.R. 2799 would preempt these efforts in Minnesota and around the country by prohibiting the classification of gig-workers as employees. This provision would cut off gig-workers' access to essential state-based rights and benefits like a minimum wage, unemployment insurance, overtime pay, health benefits, and workers compensation.

Mr. Chair, H.R. 2799 eliminates crucial investor protections which would expose the investments of American families and seniors to financial fraud. I urge my colleagues to oppose the bill.

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