Restore Trust in Congress Act
- Sponsor
- Sen. Moody, Ashley [R-FL]
- Committees
- Homeland Security and Governmental Affairs Committee (primary)
- Last action
- Jan 15, 2026
Bottom line
This bill aims to eliminate potential conflicts of interest and restore public trust by banning stock ownership and trading by federal lawmakers and their immediate families, while providing mechanisms for divestment and penalties for non-compliance.
What it actually does
This bill prohibits Members of Congress, their spouses, and dependent children from owning or trading individual stocks, commodities, futures, or any comparable economic interests. It mandates the divestment of existing prohibited holdings within 90 to 180 days of the bill's enactment or an individual becoming a covered person. The bill includes exceptions for widely held diversified investment funds, certain government bonds, and specific occupational or trust-related circumstances, and establishes penalties for violations.
Proponents argue
Supporters argue that banning stock trading by Members of Congress and their families is essential to prevent perceived and actual conflicts of interest, ensuring lawmakers focus solely on public service and restoring public trust in government. They contend it directly addresses concerns about insider trading and the use of privileged information for personal financial gain, which erodes public confidence.
Opponents contend
Opponents might argue that such a broad prohibition infringes on the financial freedom of Members and their families, potentially deterring qualified individuals from seeking public office. They may also contend that existing ethics rules, disclosure requirements, and blind trusts are sufficient, and that a complete ban is an overreach that unfairly punishes family members for their independent careers.
The bill is relatively short and clearly structured, making it accessible for a thorough review within a reasonable timeframe.
Section 1
Short Title
This section establishes the official short title of the Act as the 'Restore Trust in Congress Act.' This is the common name used to refer to the legislation, making it easier for the public and legislative bodies to identify and discuss the bill.
Supporters argue
Supporters argue that a clear and concise short title helps communicate the bill's purpose to the public and aids in legislative reference.
Critics contend
No specific opposition is typically raised against the short title of a bill, as it is a procedural element.
Section 2(b), adding Subchapter IV to Chapter 131 of title 5, United States Code, Section 13151
Definitions of Key Terms
This section defines critical terms used throughout the new subchapter, such as 'commodity,' 'covered individual' (Members of Congress, their spouses, and dependent children), and 'covered investment' (stocks, futures, derivatives, with specific exclusions). It also defines 'diversified,' 'future,' 'security,' 'small business concern,' and 'supervising ethics office.' These definitions are crucial for understanding the scope of the prohibition.
Section 13152(a)
General Prohibition on Covered Investments
This subsection establishes the core prohibition, stating that no covered individual (Members of Congress, their spouses, and dependent children) may directly or indirectly own or trade a covered investment. This is the central policy change of the bill, aiming to eliminate any financial ties to individual market performance.
Section 13152(b)
Divestment Mandate and Timeline
This section mandates that covered individuals cannot purchase new covered investments and must divest existing covered investments at fair market value. It sets an effective date for divestment: 180 days for individuals who are covered on the date of enactment and 90 days for those who become covered individuals after the bill's enactment.
Section 13152(c)
Tax Treatment for Divestment
This provision integrates the divestment requirement with Section 1043 of the Internal Revenue Code of 1986, treating the bill as a federal conflict of interest statute. This allows covered individuals (and their spouses/dependents) to receive a Certificate of Divestiture from their supervising ethics office, potentially enabling them to defer capital gains taxes on divested assets if reinvested in approved investments.
Section 13152(d)
Spousal/Dependent Occupational Trading Exception
This subsection creates an exception allowing a spouse or dependent child of a Member of Congress to trade covered investments if those investments are not owned by a covered individual and the trading is performed as a function of their primary occupation. This aims to protect the independent careers of family members who may work in finance or related fields.
Section 13152(e)
Treatment of Investments in Trusts
This section addresses investments held in trusts. It mandates that covered investments held in 'qualified blind trusts' must be divested by the effective date. It also allows for a limited exemption for 'family trusts' only if no covered individual is a grantor, contributed investments, or has authority over the trustee, and the grantor was a family member.
Section 13153
Penalties for Violations
This section outlines penalties for violating the trading or ownership restrictions. Violators must pay a fee equal to ten percent of the value of the covered investment and disgorge any profits from the illegal transaction into the U.S. Treasury. It also prohibits using official funds or campaign contributions to pay these penalties and requires the supervising ethics office to publicly publish details of all assessed fines.
Exemption for 'a widely held investment fund described in section 13104(f)(8) that is diversified and publicly traded on a national or regional stock exchange.' This provision allows covered individuals to invest in broad market funds, such as mutual funds or ETFs, provided they meet specific diversification and public trading criteria.
Section 13151(3)(B)(i)
Why it matters:This is standard legislative practice for defining terms by reference to existing statutes, but it requires a reader to consult external legal text to fully understand the scope of the exemption.
Case for: Supporters argue this exemption is vital to allow covered individuals to save and invest for retirement and other financial goals without engaging in individual stock picking, thus avoiding direct conflicts of interest while still participating in the market.
Case against: Critics might argue that the definition of 'diversified' or 'widely held' could be interpreted broadly, potentially allowing for investments that are not truly passive or could still present indirect conflicts.
Estimated impact: Significantly impacts the investment strategies available to covered individuals, allowing for passive, broad-market investing.
Exemption for 'an interest in a small business concern.' This means that ownership stakes in small businesses, as defined by the Small Business Act, are not considered 'covered investments' and are therefore not subject to the prohibition.
Section 13151(3)(B)(v)
Why it matters:This is a common legislative technique to enumerate specific exclusions within a definition, but its placement can obscure its importance.
Case for: Proponents argue this exemption is crucial to avoid penalizing entrepreneurial Members or their families, allowing them to maintain legitimate business interests that are distinct from public market trading and typically less prone to insider information concerns.
Case against: Some might argue that even small business interests could present conflicts of interest, especially if the business operates in a sector influenced by legislation, though the direct connection to public market trading is less clear.
Estimated impact: Protects the ability of covered individuals and their families to own and operate small businesses, preventing a chilling effect on entrepreneurship among public servants.
A supervising ethics office may grant a covered individual an extension of time to comply with a divestment deadline if a covered investment cannot be divested by such deadline due to low liquidity, vesting schedules, or contractual restrictions.
Section 13152(g)
Why it matters:This is a standard legislative practice to include administrative flexibilities or exceptions after the primary rules, but it's a critical detail for affected individuals.
Case for: Supporters argue this provision is essential for practical implementation, ensuring that covered individuals are not forced into financially disadvantageous sales due to strict deadlines, especially for complex or illiquid assets. It demonstrates a reasonable approach to compliance.
Case against: Critics might argue that granting extensions could introduce delays in achieving the bill's ethical goals or create opportunities for selective enforcement, though the specified reasons for extensions are quite narrow.
Estimated impact: Provides crucial flexibility for covered individuals with complex financial portfolios, potentially preventing significant financial losses during mandatory divestment.