HR 5106119th CongressIn Committee

Restore Trust in Congress Act

Introduced: Sep 3, 2025

Sponsor: Rep. Roy, Chip [R-TX-21] (R-Texas)

Civil Rights & Justice

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Restore Trust in Congress Act would expand ethics rules to restrict stock ownership and trading by Members of Congress, their spouses, and dependents. It adds a new subchapter to title 5, U.S.C., Chapter 131, prohibiting “covered individuals” from owning or trading “covered investments” during federal service, with a mandated divestment process and penalties for noncompliance. The bill defines what counts as a covered investment (including stocks, securities, futures, and certain derivatives) and provides a set of exceptions (such as broad, diversified funds, government bonds, and specific family arrangements). It also introduces compliance mechanisms (divestiture certificates, exemptions for certain trusts, and timeframes) and penalties (fines and disgorgement) to enforce the rules. The intended effect is to reduce conflicts of interest and restore public trust, though it allows some limited exceptions and transitional provisions.

Key Points

1Scope and definitions:
2- Covers Members of Congress, their spouses, and dependent children (and certain related individuals or entities) as defined in the bill.
3- “Covered investments” include securities, commodities, futures, and similar economic interests acquired through derivatives or other means; excludes certain widely held funds, government bonds, and a few other specified assets.
4- A “diversified” fund is one that does not concentrate investments in a single industry, country (outside the U.S.), or a single U.S. state (except the state where the Member resides.
5Prohibition and divestment:
6- Generally prohibits ownership or trading of covered investments during federal service.
7- Requires immediate compliance: no purchase of covered investments and divestment of existing ones at fair market value.
8- Divestment deadlines: 180 days for those already covered at enactment; 90 days for those who become covered after enactment.
9Compliance and certificates:
10- Supervising ethics offices issue certificates of divestiture once proof of compliance is provided.
11- Certificates note which properties are eligible for the divestiture program.
12Trusts and exemptions:
13- Qualified blind trusts must divest.
14- Family trusts may be exempt if specific conditions are met (no one in the family is a grantor or contributor, no authority over trustees, etc.).
15- Occupational exception allows a spouse or dependent to trade a covered investment if not owned by the covered individual and the trade is part of their primary occupation.
16Special circumstances and new acquisitions:
17- If a covered investment is acquired after enactment through events like marriage or inheritance, the individual has 90 days to divest.
18Penalties and enforcement:
19- Violations trigger a 10% fee of the investment’s value and disgorgement of profits from the prohibited transaction.
20- Penalties must be paid to the U.S. Treasury and cannot be paid from certain campaign or representational funds.
21- Penalties and their rationale are publicly posted by supervising ethics offices.

Impact Areas

Primary group/area affected:- Members of the U.S. House (and by reference, potentially Senate ethics rules) and their spouses and dependent children.Secondary group/area affected:- Financial markets through restricted activity by sitting lawmakers; investment funds and firms may experience changes in trading patterns or demand for certain assets.Additional impacts:- Compliance costs and administrative workload for supervising ethics offices; need for new procedures (certificates of divestiture, exemptions, guidance).- Potential reduction in opportunities for direct personal investment by lawmakers, which could affect perceptions of conflicts of interest and public trust.- Limited exemptions (like diversified mutual funds and certain bonds) could influence how lawmakers structure their portfolios and trusts.- Enforcement transparency via public posting of penalties and cases.Divestment: selling off covered investments and removing them from holdings.Covered investments: includes securities and derivatives; excludes widely held diversified funds and some government or state bonds.Diversified: a fund that does not focus on one industry, country (other than the U.S.), or a single state (except the Member’s residence state).Qualified blind trust: a trust managed by a third party with no ability of the Member to influence investments.Certificate of divestiture: official proof confirming compliance with the divestment requirements.

Generated by gpt-5-nano on Oct 8, 2025