Summary of HR 3422: Promoting Opportunities for Non-Traditional Capital Formation Act

Bill Overview

• Bill Number: HR 3422
• Title: Promoting Opportunities for Non-Traditional Capital Formation Act
• Introduced On: May 15, 2025
• Current Status: Received in the Senate, read twice, and referred to the Committee on Banking, Housing, and Urban Affairs.
• Primary Sponsor: Maxine Waters (D-CA)
• Cosponsor: Ann Wagner (R-MO)

Purpose and Intent

The Promoting Opportunities for Non-Traditional Capital Formation Act aims to enhance access to capital for traditionally underrepresented small businesses. The bill seeks to amend the Securities Exchange Act of 1934 by expanding the role of the Advocate for Small Business Capital Formation to include educational initiatives and events that promote various capital-raising options.

Key Provisions

The bill includes the following significant changes to the Securities Exchange Act of 1934:

1. Educational Resources:

   • The Advocate for Small Business Capital Formation is required to provide educational resources to small businesses, particularly those that are underrepresented.

2. Event Hosting:

   • The Advocate must host or participate in events aimed at raising awareness of capital-raising options for:
     • Women-owned small businesses
     • Minority-owned small businesses
     • Businesses located in rural areas
     • Small businesses affected by natural disasters, such as hurricanes

3. Collaboration with State Securities Commissions:

   • The Advocate is mandated to meet at least annually with representatives from State securities commissions to discuss collaborative efforts to assist small businesses and investors.

Impact

The bill is designed to address the disparities faced by underserved entrepreneurs in accessing capital. By mandating educational outreach and event hosting, it aims to empower small businesses that have historically struggled to secure funding. This includes a focus on:
- Women and Minority Entrepreneurs: Targeting support for businesses owned by women and minorities.
- Rural Businesses: Providing resources to businesses in less populated areas that may lack access to traditional funding sources.
- Disaster-Affected Businesses: Offering assistance to businesses recovering from natural disasters.

Legislative Timeline

• May 15, 2025: Introduced in the House and referred to the Committee on Financial Services.
• May 20, 2025: Ordered to be reported (amended) by the Committee.
• June 3, 2025: Reported favorably by the Committee on Financial Services.
• June 23, 2025: Passed in the House with a vote of 321-87.
• June 24, 2025: Received in the Senate and referred to the Committee on Banking, Housing, and Urban Affairs.

Conclusion

HR 3422 represents a significant step towards improving capital access for underrepresented small businesses in the United States. By enhancing the role of the Advocate for Small Business Capital Formation, the bill aims to foster a more inclusive economic environment that supports diverse entrepreneurs across the country.