Congress gave final approval to a popular, but controversial, bill that aims to make it easier for small businesses to access investment capital, sending President Obama one of his top job-creation priorities in a rare burst of bipartisanship.
Even as consumer regulators warned that the bill could lead to a new era of investor fraud, swift passage had been sought by Republicans and Democrats intent on scoring a political victory on the jobs front, which remains among the most pressing issues for voters.
The House approved the measure 380-41 – an overwhelming majority, but with nearly twice as many detractors as an earlier version, despite Senate efforts to beef up protections for investors.
The White House said it was “heartened” that the GOP-led chamber agreed with changes made by the Senate to strengthen investor protections, and pledged to closely monitor the outcome once the bill becomes law.
Mostly the White House appeared pleased that in this era of partisan brinkmanship, Congress was able to serve up a political win on one of the priorities the president had outlined in an economic address last fall.
“We applaud Republicans and Democrats for working together, but there is still much more work to be done to create jobs and strengthen the recovery,” said White House spokeswoman Amy Brundage.
It is unclear whether the legislation will give Congress or the White House the desired boost among voters, as experts have said the Jump-Start Our Business Startups, or JOBS Act, would not immediately create new employment. After the president signs the bill into law, it will not take effect until new investment rules are written by the Securities and Exchange Commission, a process that could push into next year.
At the same time, consumer advocates have issued grave warnings that the legislation will weaken regulatory oversight of stock offerings to private investors, particularly in the emerging practice of soliciting investors online through so-called crowd-funds.
State regulators said the bill remains a “fundamentally flawed product of a rush to legislate,” according to the North American Securities Administrators Assn.
But such concerns have been dismissed as “phantom” worries by Rep. Eric Cantor (R-Va.), the majority leader, who championed the legislation.
“We’ll see how it goes,” said Rep. Spencer Bachus (R-Ala.), the chairman of the Financial Services Committee, who said the legislation could help foster the next Google or Amazon.com. “You take the risk out, you take out the reward.”
Several lawmakers who had supported an earlier House-passed version of the bill switched their votes Tuesday as the warnings from watchdogs became more publicly known.
“The more I looked at it, I decided the previous vote was a rush to judgment and this was more deliberate,” said Rep. Raul Grijalva (D-Az.), the co-chairman of the Congressional Progressive Caucus, who voted no Tuesday. No Republicans opposed the bill.
The legislation loosens various regulations on small businesses and start-up firms seeking to raise cash, including through public offerings.
One provision would postpone for five years certain SEC reporting requirements for companies with revenues below $1 billion annually. SEC Chairman Mary Schapiro sought a lower threshold, saying it would exempt even large firms from standard reporting.
A key provision that drew scrutiny from watchdogs involves crowd-funding -- soliciting private investments online and through social media. The Senate beefed up that provision to require companies to register with the SEC.
Consumer groups also warned that curbing advertising regulations could lead to fradulent schemes targeting seniors and other vulnerable investors.
Original source: JOBS bill clears Congress, despite warnings