Expanding Access to Capital Act of 2023

Floor Speech

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Ms. WATERS. Madam Chair, I thank my colleague from Pennsylvania for offering this important amendment which mandates the SEC report on the impact Silicon Valley Bank's collapse has had on local banks and small business lending.

Our committee's previous examination of the 2023 banking crisis, while informative, should not be the end of the story. With the expertise of its talented and knowledgeable staff, the SEC can supplement our reporting and is sure to provide further valuable insight into what exactly happened and how regulators and lawmakers can avoid this from occurring again in the future.

Madam Chair, I urge my colleagues to vote ``yes'' on this amendment.
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Ms. WATERS. Madam Chair, I yield myself such time as I may consume.

Madam Chair, my amendment will provide needed transparency into the opaque world of private equity and venture capital funds, particularly around their investments in minority-owned, women-owned, veteran-owned, and rural businesses.

Today, these private funds play a big role in capital allocation, from mergers and acquisitions and non-bank lending, to restructurings and bankruptcies.

As of 2021, private funds held more than $7 trillion in investments. Venture capital funds manage nearly $1.3 trillion, providing funding to startups and early-stage companies across the country.

These are staggering numbers, but the amount going to minority-owned and women-owned businesses is not. For example, the White House earlier this month noted that Black-founded companies receive less than 1 percent of venture capital funding annually, while women-founded businesses receive just about 2 percent.

When I was the chairwoman of the Financial Services Committee, the first thing I did was to create a Subcommittee on Diversity and Inclusion.

Our committee convened dozens of hearings on diversity and inclusion, receiving hundreds of hours of testimony that highlighted one overwhelming conclusion, which was the clear business case for supporting and investing in diversity.

Study after study has found that diverse companies consistently outperform nondiverse companies despite being disproportionately undercapitalized. This is good for industry, good for business, and good for investors.

Yet, limited access to financing is restricting the ability of women and businessowners of color to fulfill their potential, generate jobs, and contribute to their communities. Because private funds do not have the same transparency requirements as other large investors, it is difficult to gauge the number, size, and scope of their commitments to women-owned, diverse-owned, veteran-owned, and rural businesses.

Moreover, following the murder of George Floyd in 2020, a number of private firms pledged to make advancements on racial and gender equity as part of their business strategy. Without accurate and timely information, investors and the public cannot hold these fund managers accountable.

That is why my amendment is so important. If private funds want to take advantage of the ability to peddle their investments to the public, which is what this bill would permit, then at the very least, they need to show how they are investing in all of America.

Madam Chair, I ask all Members to support my amendment, and I reserve the balance of my time.

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Ms. WATERS. Madam Chair, I yield myself the balance of my time.

My commonsense amendment would require private funds to disclose their investments in women-owned, minority-owned, veteran-owned, and rural businesses.

For far too long, these well-performing, well-deserving businesses have been undercapitalized and underinvested in by wealthy firms that made empty promises when it was trendy to do so.

We know that what gets measured and reported gets done. This amendment would provide the kind of transparency that investors, particularly public pension plans, want--to ensure they are investing in the most profitable parts of the economy.

Madam Chair, I strongly urge Members to vote ``yes'' on my amendment, and I yield back the balance of my time.

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Ms. WATERS. Madam Chair, I demand a recorded vote.

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Ms. WATERS. Mr. Speaker, I demand a recorded vote.

A recorded vote was ordered.

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