HR-5106-119
Referred to the House Committee on House Administration.
Sponsored by Chip Roy (R-TX)
What it does
This bill would prohibit Members of Congress, their spouses, and their dependent children from owning or trading individual stocks, commodities, futures, and derivatives. Current Members would have 180 days from enactment to divest prohibited holdings; new Members would have 90 days. Exemptions include diversified mutual funds and index funds, U.S. Treasury and municipal bonds, small business interests, personal-residence real estate LLCs, and Alaska Native Claims Settlement Act stock. Violations would result in a 10% fee on the value of the investment plus disgorgement of any profits, with penalties paid to the U.S. Treasury and published publicly.
Who benefits
The general public, who would gain greater assurance that legislative decisions are not influenced by Members' personal financial interests. Retail investors and market participants who compete against lawmakers with access to non-public legislative information. Challengers in congressional elections who could use compliance as a campaign issue. Ethics watchdog organizations that have long advocated for stronger conflict-of-interest rules. Diversified fund managers and index fund providers, who would likely receive an influx of assets from divesting Members.
Who is hurt
Current Members of Congress and their spouses and dependents who hold individual stocks and would be required to sell, potentially at an unfavorable time or with tax consequences (though the bill provides Certificates of Divestiture to defer capital gains taxes). Spouses and dependents whose personal investment strategies are restricted by their family member's elected status, even if they have no involvement in legislative activity. Financial advisors and brokers who manage individual stock portfolios for Members and their families. Potentially, Members from lower-wealth backgrounds who rely on investment income, as they would be limited to lower-yield instruments like index funds and bonds.
Supporters argue
Supporters argue that the STOCK Act of 2012 — the last major congressional trading law — has proven inadequate, with hundreds of Members filing late or missing disclosure reports and facing only nominal $200 fines. They contend that Members with access to non-public legislative information about regulations, contracts, and economic policy have a structural advantage over ordinary investors, and that a full ownership ban is the only reliable way to eliminate that conflict. The bill's bipartisan sponsorship — spanning members from both parties across the ideological spectrum — reflects broad agreement that public trust in Congress has eroded and that disclosure alone has failed to address the underlying problem.
Opponents argue
Opponents argue that a blanket ban on stock ownership extends beyond Members themselves to spouses and dependents who are private citizens with independent financial lives, raising serious due process concerns about restricting the property rights of people who hold no public office. They contend that the bill may deter qualified candidates — particularly those with financial expertise — from seeking office, and that existing disclosure requirements, if properly enforced with stronger penalties, could address conflicts of interest without an outright prohibition. Critics also note that the exemption for diversified funds still allows Members to benefit from broad market gains driven by their own legislative decisions, meaning the conflict of interest is reduced but not eliminated.
Constitutional context
The bill's restrictions on spouses and dependents could be challenged under the Due Process Clause of the Fifth Amendment, which protects against deprivation of property rights without adequate justification. The Takings Clause may also be implicated if forced divestiture at fair market value is argued to constitute a compensable taking, though courts have generally held that regulatory restrictions on financial instruments do not constitute per se takings under Cedar Point Nursery v. Hassid (2021), which addressed physical property access rather than financial assets.
Checks and balances
Congress restricts its own Members' financial activity; the supervising ethics offices (House Ethics Committee and Senate Ethics Committee) enforce compliance and assess penalties, with no new executive branch authority created.
Historical precedent
The STOCK Act of 2012 (Stop Trading on Congressional Knowledge Act) previously addressed congressional securities trading by requiring disclosure of trades within 45 days, but did not ban ownership; its enforcement has been widely criticized as ineffective.