Congresswoman McCollum's Statement on The Jumpstart Our Business Startups Act, H.R. 3606
I rise in opposition to H.R. 3606. While this legislation includes some useful provisions, it also eliminates crucial investor protections, which would expose the investments of American families and seniors to financial fraud.
H.R. 3606 attempts to create jobs by making it easier for America's entrepreneurs to raise start-up and growth capital. Unfortunately, this important goal is overshadowed by provisions in the bill that remove necessary safeguards for everyday investors. This legislation undermines the credibility of research on companies by eliminating conflict-of-interest restrictions. It allows unregulated websites to peddle stocks to ordinary investors without any meaningful oversight or liability, which could give rise to fraud and money laundering. Moreover, H.R. 3606 would allow large banking institutions with hundreds of billions of dollars in assets to de-register and escape SEC regulations that ensure corporate transparency, integrity, and accountability.
When this bill first came before the House for consideration I supported it. It was my hope that the Senate would modify H.R. 3606 to address the concerns raised by the Securities and Exchange Commission (SEC), consumer advocates and independent economists. As the New York Times recently put it, passage of H.R. 3606 could result in more sales of "worthless securities by bucket-shop brokerage firms." SEC Chairwoman Mary Shapiro wrote a letter to the U.S. Senate arguing that without appropriate protections, investors "will lose confidence in our markets and capital formation will ultimately be made more difficult and expensive." Senate amendments to restore vital consumer investor protections did not receive the necessary votes to be included in the bill before us today. As currently written, H.R. 3606 poses too great a threat to the stability of markets and the security of American's pension funds, education savings and retirement accounts to earn my support.
The United States and its people are still struggling to recover from the near-collapse of the country's financial sector. That crisis was the result of failed oversight and aggressive and irresponsible de-regulation during the George W. Bush Administration. In the four years since President Obama took office, the Dow Jones Industrial Average has increased from 7,949 to 13,197 due in large part to his bold and determined efforts to restore transparency and sensible regulation to Wall Street. Congress should not put this remarkable rally at risk by passing H.R. 3606 and making it more difficult for regulators to detect and prosecute financial fraud.
I urge my colleagues to oppose the H.R. 3606 and yield back the balance of my time.