The House Financial Services Committee is conducting a Capital Markets Subcommittee hearing to discuss the role of capital formation in economic growth. The session, led by Subcommittee Chair Ann Wagner (MO-02), aims to explore ways to enhance both public and private markets by expanding investment opportunities and reducing regulatory barriers.
In her opening remarks, Wagner emphasized the importance of securing funding for small businesses. She noted that despite the progress made by the bipartisan JOBS Act of 2012, significant regulatory obstacles still exist. "If we fail to act, we risk stifling innovation and economic expansion," she stated.
Wagner highlighted the restrictive definition of accredited investors as a major challenge. Current regulations limit private market investments primarily to high-net-worth individuals, excluding many financially knowledgeable Americans from participating. She argued that broadening investment opportunities could unlock new capital sources beneficial to both businesses and investors.
Small businesses face additional hurdles in obtaining funding due to declining traditional bank loan approval rates. Wagner asserted that no business should rely solely on financial institutions when alternative capital sources are available. By expanding investor access to private markets and simplifying regulatory requirements for raising private capital, more opportunities can be created for businesses and investors alike.
Wagner cited examples like her constituents Andrew Barnell and his sister Erica, who faced barriers despite their innovative efforts. She also referenced Acting SEC Chair Uyeda's statement: "We should be encouraging, not restricting, the ability of companies to raise capital."
The discussion aims to build on the JOBS Act foundation by reducing regulatory barriers while ensuring investor protection. Wagner announced plans for the committee to seek feedback from stakeholders on legislative proposals aimed at strengthening capital markets.
"Access to capital is not a partisan issue," Wagner concluded. "It’s about ensuring that businesses, investors, and workers have the tools they need to succeed."