From the office of Rep. Bob Dold (Ill., 10th District)…
WASHINGTON, DC – In yesterday’s Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, five bills that will empower small businesses advanced through the subcommittee. U.S. Congressman Robert Dold (IL-10) has co-sponsored each of these bills as they make it easier for small businesses to gain access to capital so they can expand and create new jobs.
“Small business is the backbone of our economy,” said Rep. Dold. “Two thirds of all net new jobs are created by small businesses. In order to help bring our economy back on solid footing, we need to create an environment in which small businesses can grow.
“Yesterday, five bills advanced through the Financial Services Committee that will help to do just that. These bills assist small business capital formation which has been restricted both by general economic conditions and by excessively restrictive, outdated, and burdensome regulations. Furthermore, this legislation is bipartisan and aligns with President Obama’s goal to cut the red tape that prevents small businesses from raising capital and going public.
“In short, these bipartisan bills utilize common sense so that small businesses are empowered to expand and create new jobs. This is exactly the type of action we should be taking in Washington to get our economy moving again.”
Background Information from the Financial Services Committee on the bills that passed through Subcommittee:
H.R. 2167, the Private Company Flexibility and Growth Act, introduced by Rep. David Schweikert
H.R. 2167 removes an impediment to capital formation for small companies by raising the shareholder threshold for mandatory registration with the SEC from 500 to 1,000 shareholders. The shareholder threshold was originally adopted in 1964 and has not been modernized since then. At a recent hearing, the Committee received testimony from witnesses regarding the impact the bill will have on the availability of credit for small companies, job creation, and economic growth.
H.R. 2940, the Access to Capital for Job Creators Act, introduced by Rep. Kevin McCarthy
H.R. 2940 removes the regulatory ban that prevents small, privately held companies from using advertisements to solicit investors for private offerings. Securities laws not only prohibit general solicitation and advertising but require investors to have an existing relationship with the company in order to meet SEC exemption requirements. This ban has limited the ability of small businesses to raise capital.
H.R. 2930, the Entrepreneur Access to Capital Act, introduced by Rep. Patrick McHenry
H.R. 2930 permits “crowdfunding” to finance new businesses by allowing companies to accept and pool donations up to $5 million without registering with the SEC. Crowdfunding is an innovative and lower-risk form of financing that enables several individuals to pool money to in a particular company. SEC regulations prohibiting general solicitation have acted as a barrier to crowdfunding developing and flourishing in the United States.
The Small Company Job Growth and Regulatory Relief Act, introduced by Rep. Stephen Fincher
This draft legislation expands the exemptions available to small companies from certain costly reporting requirements of the Sarbanes-Oxley Act. Since 2007 the SEC has exempted small companies with a market capitalization of less than $75 million. Market participants have repeatedly said the current SEC exemption provides no benefit since the threshold is too low.
H.R. 1965, introduced by Rep. Jim Himes
H.R. 1965 modifies regulations concerning registration and deregistration of small bank holding companies under securities laws. Current law prohibits community banks from deregistering if they have more than 300 shareholders. As a result, many community banks have had to buy back shares in order to meet deregistration requirements.