WASHINGTON — Following a survey of its members, the Congressional Progressive Caucus announced its official position to oppose the INVEST Act unless three provisions that weaken financial protections for ordinary Americans (Secs. 202, 205, 206) are removed.
Many of the titles of what became the INVEST Act were reported out of committee with unanimous or near-unanimous support, creating the potential for a package suitable to consider on the floor under suspension of the rules. However, Republicans insisted on attaching a number of particularly harmful provisions to the INVEST Act over the objections of Ranking Member Waters in an end-of-year deregulatory giveaway to Wall Street.
Section 202 (or H.R. 1013) expands the availability of complicated and risky financial products to underregulated 403(b) retirement plans used by millions of teachers, nonprofit workers, and others. Section 205 (or H.R. 2441) changes the default delivery method for financial disclosures to electronic notification instead of paper mail, leaving many who rely on physical mail for financial information behind. Finally, Section 206 (or H.R. 3383) would open high-risk, high-fee, volatile private funds that lack regulatory guardrails to ordinary retail investors.
With the inclusion of these three provisions, consumer advocacy groups warn that the legislation is a step in the direction of more deregulation in capital markets, particularly opaque private markets, where smaller investors are at a disadvantage compared to well-positioned insiders.
