A bill to ban Congress from trading stocks could be just weeks away, senator says

After an initial flurry of momentum, efforts to ban members of Congress from trading stocks have slowed as many lawmakers agree on the need to ban trades but haven't settled yet on the details.

Now as concerns mount that time may be running out, a key figure in the talks tells Yahoo Finance that a unity bill could come soon as lawmakers gradually move towards a consensus. In a new interview with Yahoo Finance Presents, Sen. Kirsten Gillibrand (D-NY) said around a dozen lawmakers are negotiating a draft bill and that a final one will be introduced "at some point in the next few weeks."

If the lawmakers actually deliver a proposal, it would mark a major step forward in the efforts to reform the relationship between lawmakers and Wall Street after a series of scandals in recent years have raised questions over whether lawmakers should trade stocks given their knowledge of non-public information.

Speaking to Yahoo Finance, Gillibrand suggested lawmakers have come closer to agreeing on one of the key issues — how lawmakers can put their money into blind trusts.

“We are going to create some provisions for people who come into Congress owning certain portfolios, that they can hold them in blind trust,” she said. “That's probably going to be the outcome.”

She added that cryptocurrency trading would be banned, according to the most recent draft of the unity bill, and for all securities "we would allow people to own what they own, but they would have to put it behind a blind trust."

Senator Kirsten Gillibrand (D-NY) arrives for a Senate Armed Services Committee about the Department of the Navy review of the Defense Authorization Request for Fiscal Year 2022 on Capitol Hill in Washington, U.S., June 22, 2021.      REUTERS/Joshua Roberts
Senator Kirsten Gillibrand (D-NY) is one of the negotiators on a possible bill to ban lawmaker stock trading. (REUTERS/Joshua Roberts) · Joshua Roberts / reuters

That approach would be similar to some of the current public proposals. One of the most aggressive plans — from Sens. Jon Ossoff (D-GA) and Mark Kelly (D-AZ) — allows lawmakers to move an existing asset into a blind trust without divesting it. Kelly himself has noted that he personally has gone further.

“Before I was sworn in, I took steps to put my assets in a qualified blind trust, not only can I not make trades, I don't even know what's in there,” he told Yahoo Finance in January. “The same thing is true for Senator Ossoff.”

Some advocates say this distinction is important, arguing a blind trust isn’t blind if you know the assets it holds.

“Placing individual assets into a qualified blind trust, absent a requirement to sell the original assets, is not a sufficient solution to the conflicts that these assets present,” Donald Sherman of the Citizens for Responsibility and Ethics in Washington said during a congressional hearing earlier this month.

Other outstanding issues

In addition to the blind trust issue, a range of other provisions remain publicly unresolved.