Aligning SEC Regulations for the World Bank’s International Development Association Act

Bill Number

H.R. 1764

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Passed House

Latest Action

2025-07-22: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Last Updated

2026-07-10T19:53:23Z

AI-Generated Summary

Purpose

This legislation aims to align U.S. securities regulations for the International Development Association (IDA)—an arm of the World Bank that provides loans and grants to low-income countries—by granting its securities the same exemptions from federal securities laws as those issued by other multilateral development banks (like the World Bank itself) in which the U.S. participates. The goal is to facilitate IDA's fundraising and operations without unnecessary regulatory burdens.

Key Provisions

• Exemption for IDA Securities: Securities issued or guaranteed by the IDA (including limited guarantees covering principal and interest) are classified as "exempted securities" under key U.S. laws:
• Section 3(a)(2) of the Securities Act of 1933 (which regulates the offer and sale of securities to protect investors from fraud).
• Section 3(a)(12) of the Securities Exchange Act of 1934 (which governs trading of securities on exchanges).
• Reporting Requirements: The IDA must submit annual and other reports to the Securities and Exchange Commission (SEC) as deemed appropriate, considering the IDA's unique international role and the need to protect investors and the public interest.
• SEC Suspension Authority: The SEC, in consultation with the National Advisory Council on International Monetary and Financial Problems (a U.S. interagency group advising on global finance), can temporarily suspend the exemption for any or all IDA securities. The SEC must report on the exemption's operations in its annual congressional reports.
• Effective Date: The changes take effect 30 days after the bill's enactment.
• Exception Clause: The exemption does not apply if, before the effective date, the Secretary of the Treasury notifies Congress that the IDA is providing financial aid to a country whose government has been designated by the Secretary of State as repeatedly supporting international terrorism (under specific U.S. laws like the Export Administration Act of 1979, Foreign Assistance Act of 1961, or Arms Export Control Act).

Significant Changes to Existing Law

• Amends the International Development Association Act (22 U.S.C. 284 et seq.) by adding a new Section 33, which introduces the securities exemption and related oversight mechanisms.
• This brings the IDA in line with exemptions already granted to other U.S.-member multilateral banks (e.g., the International Bank for Reconstruction and Development), which were not previously extended to the IDA despite its similar role in global development.

Potential Impacts

• On Government Agencies: The SEC gains new reporting and suspension powers, increasing its oversight of international entities while streamlining reviews. The Treasury Department and State Department may face additional coordination duties under the exception clause to monitor foreign aid and terrorism risks.
• On Citizens and Investors: U.S. investors could more easily access IDA securities without full SEC registration requirements, potentially lowering costs and risks for investments in global development projects. However, the suspension option protects against perceived security threats.
• On International Relations: Enhances the IDA's ability to raise funds in U.S. markets, supporting U.S. foreign policy goals in poverty reduction and economic stability abroad. The terrorism exception could strain relations with countries receiving IDA aid if designations lead to funding halts, affecting U.S. alliances in multilateral forums.

Main Stakeholders Affected

• International Development Association (IDA) and World Bank: Primary beneficiaries, as exemptions reduce regulatory hurdles for issuing debt to fund development projects in poorer nations.
• U.S. Government Agencies: SEC (regulatory enforcement), Treasury (oversight and reporting), State Department (terrorism designations), and congressional committees (Financial Services in the House; Banking, Housing, and Urban Affairs in the Senate) for notifications and reviews.
• Investors and Financial Markets: U.S. and global investors in development finance, who gain easier access to low-risk, socially impactful securities.
• Recipient Countries: Low-income nations relying on IDA funding, potentially facing disruptions if the exception clause is triggered.

Notable Legal, Constitutional, or Political Implications

• Legal: Strengthens investor protections through mandatory SEC reporting while exempting IDA from routine registration, balancing international comity (respect for foreign entities) with U.S. market safeguards. The suspension authority provides flexibility without needing new legislation.
• Constitutional: Aligns with Congress's powers under Article I to regulate commerce and foreign affairs, ensuring U.S. laws do not unduly hinder international financial institutions supported by taxpayer funds.
• Political: Promotes U.S. leadership in global development by harmonizing regulations, but the terrorism exception introduces a national security check that could politicize aid decisions, potentially influencing bipartisan support for multilateral banks amid debates on foreign assistance.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Waters, Maxine [D-CA-43]

Recent Actions

• 2025-07-22: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.
• 2025-07-21: Motion to reconsider laid on the table Agreed to without objection.
• 2025-07-21: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H3513)
• 2025-07-21: Passed/agreed to in House: On motion to suspend the rules and pass the bill, as amended Agreed to by voice vote. (text: CR H3513)
• 2025-07-21: DEBATE - The House proceeded with forty minutes of debate on H.R. 1764.
• 2025-07-21: Considered under suspension of the rules. (consideration: CR H3513-3514)
• 2025-07-21: Mr. Hill (AR) moved to suspend the rules and pass the bill, as amended.
• 2025-03-21: Placed on the Union Calendar, Calendar No. 15.
• 2025-03-21: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-25.
• 2025-03-21: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-25.
• 2025-03-05: Ordered to be Reported (Amended) by the Yeas and Nays: 49 - 0.
• 2025-03-05: Committee Consideration and Mark-up Session Held
• 2025-03-03: Referred to the House Committee on Financial Services.
• 2025-03-03: Introduced in House
• 2025-03-03: Introduced in House

Bill Versions

• Aligning SEC Regulations for the World Bank’s International Development Association Act — issued 2025-07-21 — PDF (6 pages)
• Aligning SEC Regulations for the World Bank’s International Development Association Act — issued 2025-03-03 — PDF (4 pages)
• Aligning SEC Regulations for the World Bank’s International Development Association Act — issued 2025-07-22 — PDF (4 pages)
• Aligning SEC Regulations for the World Bank’s International Development Association Act — issued 2025-03-21 — PDF (6 pages)