A bipartisan bill that would ban members of Congress from trading individual stocks has passed a key Senate committee.

Introduced earlier this month, the Ending Trading and Holdings in Congressional Stocks, or ETHICS Act, was approved by the Senate Committee on Homeland Security and Government Affairs on Wednesday.

What You Need To Know

  • A bipartisan bill that would ban members of Congress from trading individual stocks has passed a key Senate committee for the first time

  • Earlier this month, Sens. Jeff Merkley, D-Ore., Josh Hawley, R-Mo., Jon Ossoff, D-Ga., and Gary Peters, D-Mich., introduced the ETHICS Act to prohibit Congress members and their immediate family members from selling and buying stocks, commodities or futures

  • If passed, violators of the law would be penalized in the amount of one month’s salary or 10% of the value of the asset they had sold or purchased.

  • The Senate Committee on Homeland Security and Government Affairs approved the ETHICS Act Wednesday

“Members of Congress should serve the people, not their portfolios,” Sen. Jeff Merkley, D-Ore., said in a statement. “For the first time, a Senate committee considered and passed legislation to ban Congressional stock trading, a practice that appears deeply corrupt to the American people and erodes public respect for our government institutions. There should be no question about whether a lawmaker is voting on or writing legislation in the best interests of their constituents or the best interests of their investments.”

Earlier this month, Merkley along with Sens. Josh Hawley, R-Mo., Jon Ossoff, D-Ga., and Gary Peters, D-Mich., introduced the act that would prohibit Congress members and their immediate family members from selling and buying stocks, commodities or futures. If passed, violators of the law would be penalized in the amount of one month’s salary or 10% of the value of the asset they had sold or purchased.

The law bans selling and buying stocks 90 days after the bill becomes law so Congress members can divest themselves of their holdings or place them in a qualified blind trust with a divestiture requirement. It also bans their spouses and dependent children from stock trading as of March 2027.

More than 85% of Democrats and Republicans support the ETHICS Act, according to Merkley.

The ETHICS Act isn’t the first to address stock trading by members of Congress. In 2012, the Stock Act was signed into law, preventing lawmakers from using insider information to trade stocks, but it is not enforced.

“Today’s news is a victory for the movement to rein in corruption and restore faith in Congress,” Joshua Graham Lynn, of the nonprofit RepresentUs said in a statement. “Thanks to widespread outrage from across the political spectrum, leaders from both parties have joined forces to push a congressional stock ban further than it has ever gone before. The stage is now set for the ETHICS Act to get a full vote on the Senate floor.”