Ban Congressional Stock Trading Act
The Ban Congressional Stock Trading Act would reshape how members of Congress and their immediate family manage investments. It requires current and newly elected members (and their spouses and dependent children) to divest or move all “covered investments” into qualified blind trusts within set deadlines. Covered investments include direct securities, commodities, futures, and certain indirect interests (for example, through funds or trusts), but exclude diversified mutual funds/ETFs, U.S. Treasuries, compensation for spouses/dependent children, and investments held in government employee retirement plans. The bill imposes ongoing reporting, public transparency, and strict restrictions on acquiring new covered investments during service, plus a cooling-off period after leaving office. Noncompliance could result in civil penalties tied to the member’s pay. In short, the act aims to reduce potential conflicts of interest and the appearance of self-dealing by eliminating active stock or similar trading by members and their families, while providing a formal, supervised framework (blind trusts) to manage any assets that remain or are transferred into trust.
Key Points
- 1Covered investments and exclusions
- 2- Defines covered investments as direct securities, commodities, futures, and economic interests gained through derivatives or similar means, including indirect holdings via funds, trusts (except qualified blind trusts), employee benefit plans, or deferred compensation plans.
- 3- Excludes diversified mutual funds or ETFs, U.S. Treasuries, compensation from a spouse/dependent child’s primary occupation, and investments held in government retirement plans.
- 4- Clarifies that investments meeting ESG criteria do not automatically become covered investments merely due to such criteria.
- 5Requirements for current and new Members
- 6- Current members: within 30 days of enactment, certify how each covered investment will be divested or placed into a qualified blind trust, or certify that no covered investments are owned.
- 7- Within 120 days, divest or place each covered investment into a qualified blind trust; extensions allowed up to a total of 180 days (with up to 45-day single extensions).
- 8- New members: within 30 days of taking office, certify and within 120 days divest or place into a blind trust, with the same extension rules.
- 9Prohibition on acquiring new covered investments
- 10- While in office, members and their spouses/dependent children may not acquire new covered investments.
- 11- Inherited covered investments may be divested or moved into a blind trust within 120 days of inheritance, with extension provisions.
- 12Qualified blind trusts and mingling
- 13- A blind trust must be a qualified blind trust approved in writing by the supervising ethics office.
- 14- Spouses and dependent children may merge assets into a blind trust established by the member.
- 15Cooling-off and control period after service
- 16- A 180-day cooling-off period after leaving Congress during which the member and eligible family members may not dissolve a blind trust or otherwise exercise control over covered investments (except as allowed by the statute).
- 17Reporting and transparency
- 18- Supervising ethics offices must publish on their website:
- 19- Certifications, blind trust agreements, notices, and related documents.
- 20- A schedule of assets placed in blind trusts and details of any extensions or penalties.
- 21- Trustees must notify if an interested party learns of trust assets or if the initial property falls below $1,000, and must report events such as dissolution.
- 22Enforcement and penalties
- 23- Supervising ethics offices can issue penalties for failing to certify or to move assets into a blind trust.
- 24- Civil penalties equal to the monthly equivalent of the Member’s annual pay, issued starting 30 days after notice and continue every 30 days until compliance.
- 25Oversight and administration
- 26- Supervising ethics offices are empowered to implement procedures, issue rules, and publish relevant documents to run the program.
- 27Administrative changes
- 28- Adds a new subchapter to title 5, U.S. Code, with definitional provisions and the placement provisions, and updates the table of sections accordingly.