April 26, 2023

Financial Services Committee Unanimously Passes Bill Championed by Rep. Vargas that Increases Number of Accredited Investors in America

Media Contact: Brian Garcia | (202) 360-8950 | Brian.Garcia3@mail.house.gov

WASHINGTON, D.C. – Today, Rep. Juan Vargas (CA-52) successfully championed H.R. 835, the Fair Investment Opportunities for Professional Experts Act, through the Financial Services Committee (FSC) with a unanimous bipartisan vote. This bill expands the Securities and Exchange Commission’s (SEC) definition of “accredited investor” to include people who have relevant qualifications or credentials, such as an MBA or a Financial Industry Regulatory Authority (FINRA) certification. Currently, the requirements to become an “accredited investor” are primarily based on financial thresholds.

Becoming an “accredited investor” is an attractive title officially recognized across the financial industry. Accredited investors are considered to have a higher level of financial sophistication and can assume greater risks in their investment activities. This allows them to participate in certain types of investment opportunities that are not available to the general public. 

“There are many Americans, particularly those from disadvantaged or underserved communities, who are well-educated and qualified in investment practices but are unable to become an “accredited investor” because of astronomical financial requirements”, said Rep. Juan Vargas. “This bill removes these systematic hurdles while ensuring prospects are knowledgeable and capable of these newfound financial opportunities. Increasing our nation’s pool of “accredited investors” will also enhance the ability of many small businesses to further grow and raise capital. This is not only the right thing to do, but it’s financially the smart thing to do.”

Currently, financial requirements to become an “accredited investor” include having a net worth of at least $1 million, excluding the value of their primary residence, or having an annual income of at least $200,000 (or $300,000 for joint income with a spouse) for the past two years and a reasonable expectation of the same income level in the current year.

The bill was introduced in the 118th Congress by Rep. French Hill (AK-02) and championed by Rep. Vargas who sits on FSC, which is the committee with direct jurisdiction. Find the full bill text here.