The U.S. House of Representatives passed 10 bills from the House Financial Services Committee on June 23, legislation that collectively supports small businesses, expands access to capital, protects homebuyers, and more.
The Fair Investment Opportunities for Professional Experts Act, H.R. 3394, sponsored by House Financial Services Committee Chairman French Hill (R-AR), passed the House by a bipartisan vote of 397-12. H.R. 3394 expands the definition of “accredited investor” under the Securities Act of 1933 to include individuals with certain licenses, education, or job experience, beyond just those meeting wealth and income thresholds.
As Hill explained, most small companies raise start-up or expansion funds in the private market because of the significant costs and barriers to raising capital in the U.S. public markets. In the public markets, most offerings are limited to “accredited investors.” However, the current “accredited investor” definition focuses on the financial status of the investor, and as a result, only wealthy individuals can participate in private offerings. This, in effect, bars the majority of Americans from what may be attractive investment opportunities.
“Before I was in Congress, I helped investors and founders found companies and raise funds through Reg D private placements. I witnessed firsthand how the current accredited investor definition impaired talented, knowledgeable innovators from fully participating in their business formation dream,” Rep. Hill said on Monday.
The House also passed the Homebuyers Privacy Protection Act, H.R. 2808, sponsored by Rep. John Rose (R-TN). H.R. 2808 amends the Fair Credit Reporting Act (FCRA) to limit the ability of credit reporting agencies (CRAs) to sell “triggers leads” to mortgage brokers and lenders when a consumer’s credit report is pulled in relation to a mortgage application. It was unanimously passed in the House by voice vote.
“Currently, credit bureaus are notified when a consumer applies for mortgage financing. That information, which is referred to as a ‘trigger lead’, is then often sold by the credit bureaus to data brokers and other lenders without the consumers knowledge or approval… The Homebuyers Privacy Protection Act would dramatically reduce the number of unwanted calls and messages that millions endure during the homebuyer process,” Rep. Rose said on Monday.
The Mortgage Bankers Association (MBA) commended the House’s passage of the Homebuyers Privacy Protection Act.
“The passage of this consequential bill, on the heels of the Senate passing its similar bill on June 12th, is another important step forward in our fight to provide relief for consumers who face a torrent of unwanted emails, texts, and phone calls the moment they apply for a mortgage,” MBA President and CEO Bob Broeksmit said. “After two years of unrelenting advocacy efforts, MBA and its members are more optimistic than ever that the abusive use of mortgage credit trigger leads is close to an end.”
Broeksmit said MBA will work with the bill’s sponsors to reconcile the minor differences between the two bills so that one bill can be passed as soon as possible.