Congress Must Sell or Blind-Trust Stocks Within 120 Days Under New Ethics Bill

This bill, officially titled the Ban Congressional Stock Trading Act, cuts straight to the chase: it forces Members of Congress, their spouses, and their dependent children to either sell off most of their individual stock holdings or place them into a qualified blind trust. This isn't just about selling off a few shares; it covers stocks, commodities, futures, and complex financial products like derivatives. Current members get 120 days from the law's enactment to comply, and new members get 120 days from taking office. The core purpose is to eliminate the appearance—and the reality—of lawmakers profiting from inside information gleaned during their public service.

The 120-Day Clock: What Has to Go

For anyone holding a "covered investment," the clock starts ticking fast. Within 30 days of the law passing, a Member must tell the ethics office whether they plan to sell the asset or move it into a blind trust. The hard deadline is 120 days. If you’re a Member of Congress who owns shares in, say, a major defense contractor, you’ve got four months to either liquidate that position or hand it over to a trustee who manages it without your knowledge. If you can’t get the trust set up in time, the bill says you must sell the asset. They can ask for extensions, but the total extra time is capped at 180 days, meaning this isn't a rule you can just drag your feet on.

What They Get to Keep (and Why)

The bill is strict, but it’s not asking Members to divest everything. The good news for personal finance purposes is that they can keep their diversified mutual funds, diversified exchange-traded funds (ETFs), and U.S. Treasury bonds. The bill defines “diversified” as not focusing too heavily on one industry or one country (other than the U.S.). This is a practical distinction: a Member still gets to save for retirement and invest in the overall economy—just not in a way that allows them to use specific legislative knowledge to pick winners and losers. Crucially, once this law is enacted, the Member and their family are barred from acquiring any new covered investments while the Member is in office.

The Fine Print on Enforcement

This bill has teeth, thanks to specific penalties and mandatory transparency measures outlined in Section 2. The ethics offices are in charge of enforcement. If a Member misses the deadline, the ethics office first issues a warning. If they still haven't complied 30 days after that warning, the ethics office must impose a civil penalty equal to the Member’s monthly salary. And here’s the kicker: that penalty is charged again every 30 days until they comply. This escalating financial penalty makes non-compliance prohibitively expensive, which is exactly what you want to see in ethics legislation.

Transparency is also built in. The ethics office must publicly post copies of the trust agreements, any extensions granted, and, yes, any civil penalties handed out. For everyday people, this means we get to see who is complying and who isn’t. While the goal is to clean up potential conflicts of interest, the immediate impact for Members and their families is a significant administrative burden and a forced restructuring of their personal finances. For the rest of us, it’s a necessary step toward ensuring our representatives are focused on public service, not portfolio management.