Restore Trust in Congress Act
- Bill Number
- S. 3649
- Origin Chamber
- Senate
- Congress
- 119th Congress, Session 2
- Policy Area
- Government Operations and Politics
- Status
- Introduced
- Latest Action
- 2026-01-15: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
- Last Updated
- 2026-07-09T22:04:03Z
AI-Generated Summary
Purpose
The "Restore Trust in Congress Act" aims to prevent conflicts of interest by prohibiting Members of Congress, their spouses, and dependent children from owning or trading certain financial investments, such as stocks. This is intended to restore public trust in Congress by ensuring lawmakers' decisions are not influenced by personal financial gains.
Key Provisions
- Definitions:
- Covered individuals: Includes Members of Congress, their spouses, dependent children, and certain trusts holding investments for these people.
- Covered investments: Broadly includes stocks (securities), commodities, futures (contracts to buy/sell assets at a future date), and similar interests like derivatives (financial tools deriving value from other assets). Excludes items like diversified mutual funds traded on public exchanges, U.S. Treasury bonds, state/municipal bonds, small business interests, personal real estate LLCs, and specific Alaska Native settlement stocks.
- Other terms: Defines "diversified" funds as those not concentrated in one industry, country (except the U.S.), or state (except the member's residence); "small business concern" as per existing small business law.
- Prohibitions and Compliance:
- Covered individuals cannot own or trade covered investments during federal service.
- Existing holdings must be sold (divested) at fair market value within 180 days of enactment for current members or 90 days for new ones.
- Acquisitions through non-purchase means (e.g., inheritance, marriage) require divestment within 90 days.
- Extensions possible for low-liquidity assets, vesting schedules, or contracts.
- Exceptions:
- Spouses or dependents can trade if it's part of their primary job and not owned by a covered individual.
- Qualified blind trusts (where the owner has no knowledge or control) must divest by deadlines.
- Family trusts may be exempt if no covered individual created, contributed to, or controls it, and it's from a family member.
- "Certificates of divestiture" allow deferred taxes on sales, treating this law like other federal conflict rules; issued by ethics offices upon proof of compliance.
- Enforcement and Penalties:
- Supervising ethics offices (e.g., Senate or House ethics committees) issue guidance, handle exemptions/extensions, and impose penalties.
- Violations result in a 10% fee on the investment's value plus disgorging (returning) any profits from illegal trades; payments go to the U.S. Treasury.
- Members cannot use official funds, campaign contributions, or similar sources to pay penalties.
- Ethics offices must publicly post details of fines, reasons, and outcomes on websites.
Significant Changes to Existing Law
- Adds a new Subchapter IV to Chapter 131 of Title 5, U.S. Code (federal ethics laws), introducing specific bans on stock ownership and trading for Congress members and families—previously, ethics rules required disclosures but did not outright prohibit such activities.
- Integrates with tax laws (e.g., Section 1043 of the Internal Revenue Code) to offer tax relief for divestments, treating this as a conflict-of-interest statute.
- Expands definitions from existing laws (e.g., Securities Exchange Act, Commodity Exchange Act) but carves out new exceptions tailored to congressional life, like small businesses or Alaska Native stocks.
Potential Impacts
- On Government Agencies: Supervising ethics offices will face increased workload for guidance, certifications, exemptions, and enforcement; requires public reporting, enhancing transparency but adding administrative burdens.
- On Citizens: May boost public confidence in Congress by reducing perceptions of insider trading (using non-public info for profit), potentially leading to fairer policymaking; however, could limit financial options for families of lawmakers.
- On International Relations: No direct impacts mentioned, though restrictions on commodities/futures might indirectly affect members involved in trade or economic policy.
Main Stakeholders Affected
- Members of Congress and Families: Directly restricted in personal investments; must divest holdings, potentially facing financial adjustments or tax implications.
- Ethics Offices: Responsible for oversight, issuing certificates, granting exemptions, and enforcing penalties.
- Financial Institutions and Investors: Affected by divestment requirements, which could increase market activity from sales; small businesses and funds may see exemptions benefiting certain holders.
- Public and Taxpayers: Benefit from increased transparency and trust; penalties fund the Treasury.
Notable Legal, Constitutional, or Political Implications
- Legal: Strengthens federal ethics framework by mandating divestment and penalties, but relies on ethics offices for interpretation, which could lead to challenges over definitions (e.g., what counts as "diversified"). Integrates with tax and securities laws without creating new courts.
- Constitutional: May raise questions under the Fifth Amendment (property rights) if seen as forcing sales without just compensation, though certificates mitigate this via tax deferrals; applies only to public officials, aligning with regulations on conflicts of interest for government roles.
- Political: Addresses widespread concerns about congressional stock trading amid high-profile scandals, potentially reducing partisan divides on ethics but facing resistance from members with significant investments; could influence future campaigns by emphasizing anti-corruption themes.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (2)
Sen. Gillibrand, Kirsten E. [D-NY], Sen. Young, Todd [R-IN]
Recent Actions
- 2026-01-15: Read twice and referred to the Committee on Homeland Security and Governmental Affairs.
- 2026-01-15: Introduced in Senate
Bill Versions
- Restore Trust in Congress Act — issued 2026-01-15 — PDF (11 pages)