Restore Trust in Congress Act Bans Lawmaker Stock Trading: 180-Day Divestment Deadline Set

The Restore Trust in Congress Act aims to shut the door on insider trading and conflicts of interest by banning Members of Congress, their spouses, and their dependent children from owning or trading individual stocks, commodities, and futures. Under Section 2, these 'covered individuals' are essentially restricted to 'safe' investments like diversified mutual funds, ETFs, and U.S. Treasury bonds. If the bill passes, sitting members have exactly 180 days to sell off their prohibited holdings, while new members will get a 90-day window to clean up their portfolios. To make this massive sell-off less painful, the bill allows them to use 'certificates of divestiture' to defer capital gains taxes, meaning they won't get hit with a giant tax bill just for complying with the law.

Cleaning Out the Portfolio

For a typical Member of Congress who might own shares in a tech giant or an oil company, this bill forces a total financial makeover. They can't just move the stocks into a standard trust they control; the rules for family trusts are incredibly strict, requiring that no family member created the trust or has any say over the trustee. There is a small 'occupational exception' for spouses who actually work in finance, but generally, the days of picking winners and losers while voting on industry regulations are over. If a Member inherits a stock out of the blue, they have 90 days to offload it at fair market value.

Real Teeth for Rule-Breakers

This isn't just a polite request for better behavior; the bill backs up its rules with significant financial hits. Anyone caught violating the trading ban faces a penalty of 10 percent of the investment's value, plus they have to hand over any profits made from the illegal trade to the U.S. Treasury. Crucially, the bill explicitly forbids lawmakers from using their official office budgets or campaign donations to pay these fines—the money has to come out of their own pockets. To keep things transparent, every single fine and the reason behind it will be posted on a public website for anyone to see.

The Fine Print on Fairness

While the bill is aggressive, it does recognize that some assets are hard to move. Section 2 allows for extensions if an investment is 'illiquid'—meaning it can't be sold quickly—or tied up in a complex vesting schedule. For the average person, this means your representative can still own their family farm or a small local business through an LLC, as these are specifically excluded from the ban. The focus is squarely on the liquid stock market where the temptation for insider trading is highest, ensuring that those writing the laws aren't also betting on the outcomes.