Trust in Congress Act: What the Proposed Lawmaker Stock Trading Ban Means for You

Table of Contents#

What Is the Trust in Congress Act, Exactly?
Why the Ban Is Long Overdue: Preceding Scandals and Public Demand
Key Provisions of the Proposed Legislation
Arguments For and Against the Stock Trading Ban
Legislative Path Forward: What Happens Next?
How the Ban Impacts Everyday Americans
Frequently Asked Questions (FAQs)

What Is the Trust in Congress Act, Exactly?#

The Trust in Congress Act is a bipartisan bill co-sponsored by a cross-party pair of U.S. Senators (Jon Ossoff, D-GA, and Josh Hawley, R-MO) and U.S. Representatives (Abigail Spanberger, D-VA, and Chip Roy, R-TX). Unlike previous partisan reform proposals, it was drafted to eliminate conflicts of interest by restricting the ability of sitting members of Congress to profit from non-public information they access as part of their official duties.

It is not the first attempt to regulate lawmaker stock trading, but it is the most far-reaching and widely supported bipartisan proposal to date, with more than 80 co-sponsors across both chambers of Congress as of mid-2024.

Why the Ban Is Long Overdue: Preceding Scandals and Public Demand#

The push for a congressional stock trading ban gained widespread traction following high-profile insider trading scandals during the COVID-19 pandemic:

In early 2020, then-Senator Richard Burr (R-NC) sold up to $1.7 million in stock holdings just weeks before the pandemic crashed global markets, after receiving a closed Senate Intelligence Committee briefing on the severity of the virus that was not shared with the public. No criminal charges were filed.
Then-Senator Kelly Loeffler (R-GA) sold $1.5 million in stock and bought shares of remote work software companies following the same briefing, also avoiding charges.

These scandals exposed major gaps in the 2012 STOCK Act, the existing law intended to ban congressional insider trading. The STOCK Act requires members to disclose trades within 45 days, but penalties for late or missing disclosures start at just $200, and fines are often waived entirely. A 2022 Office of Congressional Ethics report found more than 300 members of Congress had violated STOCK Act disclosure rules between 2020 and 2022, with fewer than 5 facing meaningful penalties.

Public support for a full stock trading ban is consistent across party lines: 2023 Pew Research Center data shows 86% of U.S. adults, including 82% of Republicans and 90% of Democrats, support banning members of Congress from trading individual stocks.

Key Provisions of the Proposed Legislation#

The Trust in Congress Act includes four core, clearly defined rules:

Restricted Assets Ban Sitting members of Congress, their spouses, and dependent children are prohibited from trading individual stocks, cryptocurrencies, corporate bonds, commodities, derivatives, and hedge fund holdings. Permitted assets include diversified index funds, ETFs, mutual funds, 401(k) accounts, government bonds, and standard savings accounts, as these assets cannot be easily manipulated using non-public legislative information.
Mandatory Divestment or Blind Trust Requirement Within 90 days of being sworn into office, members must either sell all restricted assets or transfer them to a qualified blind trust managed by an independent third-party fiduciary. Members have no input or oversight over trades in a blind trust, eliminating any opportunity to profit from non-public information.
Strict Penalties for Violations Any member found to have violated the ban will pay a fine equal to 100% of the value of the illegal trade, or $10,000 (whichever is higher). Repeat violators may face additional sanctions from the House or Senate Ethics Committee, including removal from committee assignments or formal censure.
Enhanced Public Transparency All divestment actions and blind trust arrangements must be publicly disclosed on a free, searchable congressional website within 30 days of being finalized, so voters can easily verify their representatives are complying with the rules.

Arguments For and Against the Stock Trading Ban#

Arguments in Support#

Eliminates conflicts of interest: Lawmakers will no longer be able to prioritize their own investment portfolios over public good. For example, a member holding $1 million in pharmaceutical stock will no longer have a personal financial incentive to block legislation capping prescription drug prices.
Rebuilds public trust: The reform proves members of Congress are accountable to voters, not their personal wallets, which can increase civic participation and confidence in government decisions.
Levels the playing field: Regular investors do not get access to closed-door briefings on national security, economic policy, or regulatory changes that can move stock prices, so lawmakers should not get that unfair advantage either.

Arguments in Opposition#

Discourages qualified candidates from running: Critics argue the divestment requirement will deter people with diverse investment portfolios from running for office, as they would be forced to sell assets to serve. Supporters counter that public service is a public trust, and candidates who are unwilling to separate their personal finances from their legislative duties are not fit to serve.
Infringes on spousal financial autonomy: Opponents claim the bill unfairly restricts the independent financial decisions of a lawmaker’s spouse, who may have their own career unrelated to Congress. The bill’s drafters note spouses remain free to hold all permitted assets and earn non-investment income without restriction.
Existing rules are sufficient: Some critics argue the STOCK Act already bans insider trading, and better enforcement of that law is sufficient. But 12 years of STOCK Act data shows minimal enforcement, with fewer than 10 members ever facing significant penalties for violations.

Legislative Path Forward: What Happens Next?#

As of mid-2024, the Trust in Congress Act has been referred to the Senate Homeland Security and Governmental Affairs Committee and the House Administration Committee.

Next steps: Committee leadership will hold public hearings, vote on amendments to the bill, and decide whether to advance it to a full floor vote in each chamber.
House leadership has signaled it may bring the bill to a full floor vote in fall 2024, ahead of the November general elections, as polling shows voting against the ban could be a major liability for incumbents in competitive races.
If passed by both the House and Senate, the bill will go to the president’s desk for signature. If signed into law, it will take effect for the 119th Congress, sworn in in January 2025, and will not apply retroactively to trades made before that date.

How the Ban Impacts Everyday Americans#

The Trust in Congress Act is not just a Washington insider reform: it will have tangible impacts for everyday voters:

Legislation is decided on merit, not profit: When Congress debates policies from healthcare to climate change to financial regulation, you will no longer have to wonder if lawmakers are voting to protect their own stock portfolios instead of your interests.
Higher trust in government leads to better civic outcomes: Research shows higher public trust in government is associated with higher voter turnout, more participation in local community programs, and higher support for public investments in education, infrastructure, and social safety net programs.
Sets a precedent for broader ethics reform: If passed, the ban is likely to lead to similar restrictions for other federal officials, including federal judges and Supreme Court justices, who currently face no rules restricting stock trading and have been involved in their own high-profile ethics scandals in recent years.

Frequently Asked Questions (FAQs)#

Q: Does the ban apply to former members of Congress?#

A: No, it only applies to sitting members and their immediate families while the member holds office.

Q: What if I already owned restricted stocks before being elected to Congress?#

A: You can either sell those stocks within 90 days of being sworn in, or transfer them to a qualified blind trust for the duration of your time in office.

Q: Are members allowed to invest in real estate under the ban?#

A: Yes, the current version of the bill only restricts securities like stocks, crypto, and corporate bonds. Physical real estate holdings are permitted, as are diversified real estate investment trust (REIT) index funds.

Q: Can members of Congress still receive stock as part of an inheritance?#

A: Yes, but they must sell the inherited restricted stock or transfer it to a blind trust within 90 days of receiving it.

References#

Gallup. (2024). U.S. Congressional Approval Rating Tracking Poll. Retrieved from https://news.gallup.com/poll/1600/congress-public-approval.aspx
Congress.gov. (2024). H.R.1247 - Trust in Congress Act of 2024. Retrieved from https://www.congress.gov/bill/118th-congress/house-bill/1247
Pew Research Center. (2023). Public Trust in Government: 1958-2023. Retrieved from https://www.pewresearch.org/politics/2023/09/19/public-trust-in-government-1958-2023/
Office of Congressional Ethics. (2022). Review of STOCK Act Compliance in the 117th Congress. Retrieved from https://oce.house.gov/reports/stock-act-compliance-review
U.S. Senate Office of Jon Ossoff. (2023). Bipartisan, Bicameral Group Introduces Trust in Congress Act to Ban Lawmaker Stock Trading. Retrieved from https://www.ossoff.senate.gov/press-releases/bipartisan-bicameral-group-introduces-trust-in-congress-act-to-ban-lawmaker-stock-trading/