Rep. Chip Roy (R-TX) and Seth Magaziner (D-RI) introduced bipartisan legislation, H.R. 5106, the Restore Trust in Congress Act. This legislation aims to ban Members of Congress and their families from engaging in insider trading and reconciles several previously introduced bills on the subject.

Under current law, federal lawmakers are required to disclose their stock sales and purchases. The bill requiring disclosure, The Stock Act, was signed into law in 2012. At the time, lawmakers and government watchdogs predicted that public disclosure would shame lawmakers out of actively buying and selling stock, according to bill sponsors that hasn’t happened.

The sponsors said they merged their own, individual bills on banning stocks and came together with a single bipartisan effort. Rep. Roy said the group had been meeting for the last several months, and some sponsors had actually been working on this for years. About a dozen lawmakers from both parties joined Roy onstage. It was an unusually festive moment as the partisan lines in Congress have rarely been sharper.

While the legislation would not allow lawmakers to own individual stocks and bonds, they would be allowed to own diversified mutual funds and ETFs and certain commodities. Lawmakers who currently own individual stocks and bonds would have 180 days to divest. New members would have 90 days to divest upon taking office.

A version of the trading ban that advanced out of one Senate panel was described by Republican Sen. Ron Johnson of Wisconsin as “legislative demagoguery.”

“We do have insider trading laws. We have financial disclosure. Trust me, we have financial disclosure,” Johnson said. “So I don’t see the necessity of this.” 

The Restore Trust in Congress Act:

Covered assets:

• Prohibits all Members of Congress, their spouses, dependent children, and their trustees from owning, buying or selling individual stocks, securities, commodities, or futures.
• The following exceptions are permitted:
  • Widely held investment funds such as mutual funds and ETFs, provided that they are diversified and not concentrated in any industry, business, or single country other than the United States or single state, except for Member’s state of residence
  • S. Treasury, state, or municipal bond, note, bill
  • Precious metals (gold, silver, etc.)
  • Shares of Settlement Common Stock, as defined in the Alaska Native Claims Settlement Act
  • An interest in a small business concern
  • Family trusts if no covered individual is a grantor of the trust, has contributed any asset to the trust, has any authority over a trustee of the family trust, or the grantor of the family trust is or was a family member of a covered individual
  • An asset that is received as compensation from the occupation of a spouse or dependent
  • An asset that is not owned by a spouse or dependent but is traded on behalf of others through their primary occupation
  • Personal residences in LLCs

• Upon enactment, covered individuals are prohibited from purchasing covered assets and must divest from all covered assets at fair market value within 180 days for current members and 90 days for incoming members. Individuals who acquire covered assets through inheritance during the course of their service will be required to divest those assets within 90 days of receipt.
• Members may apply to the supervising ethics committee for an extension of a divestment deadline if investment can't be sold by a deadline due to low liquidity, vesting schedules, or contractual restrictions.
• Capital gains taxes may be deferred for all divestments through a Certificate of Divesture process, as is currently permitted for executive branch employees.
  • For example, if a member divests all previously held individual stocks and reinvests in a mutual fund, the taxes on the sale of the individual stocks may be deferred until the member later sells out of the mutual fund.

In Favor:

Congressman Chip Roy (R-TX) said: "It’s far past time to ban Members of Congress from day trading stocks, and for the first time, a bipartisan coalition is standing together behind a united proposal to do just that.  The Restore Trust in Congress Act ensures that members of Congress will no longer be able to put the stock market first in their official decisions. This bill strikes a balance between being easy to comply with, but without tons of loopholes for Members to continue trading while on the job.  We must vote on this bill and put this conflict of interest to bed for once and for all. I look forward to seeing the Restore Trust in Congress Act move through the legislative process."

Against:

Legislation banning Members of Congress and their families from owning or trading stocks may sound like a safeguard against corruption, but it sets a dangerous precedent by unfairly singling out public servants and their households. Such a prohibition would effectively penalize lawmakers for choosing to serve, forcing them and their families to forgo legitimate investment opportunities available to every other citizen. Existing laws, such as the STOCK Act, already require detailed disclosure of financial transactions, creating transparency and accountability without stripping individuals of their economic rights. A blanket ban would deter qualified professionals from running for office, especially those with significant personal assets or spouses with independent careers, and risks turning congressional service into something only accessible to the wealthy or those willing to sacrifice financial security. Rather than restricting ownership outright, Congress should focus on strengthening disclosure requirements and enforcement mechanisms to address conflicts of interest without infringing on personal freedoms.  

Should Congress pass H.R.5106, the Restore Trust in Congress Act?