Following pressure from progressives and government watchdog groups, House Speaker Nancy Pelosi is reportedly moving toward a proposal to ban members of Congress from trading individual stocks.
The development, first reported Wednesday by Punchbowl News, which cited multiple sources involved in the discussion, marks a shift from Pelosi (D-Calif.). She's previously defended individual stock trading by federal lawmakers, declaring, "We are a free market economy."
The House Administration Committee is reportedly drafting a proposal, which would then be put before Pelosi for her stamp of approval.
According to the reporting, Pelosi and other House Democratic leaders are looking at making changes to the 2012 STOCK Act and possibly other laws including the Ethics in Government Act, and are working out details including how such a proposal would affect lawmakers' family members' stock activity.
In addition to members of Congress, the suite of reforms could also cover senior staff and federal judges.
The shift comes just days after Senate Majority Leader Chuck Schumer (D-N.Y.) indicated he's going to help push a stock trading ban forward—a development which, according to Citizens for Responsibility and Ethics in Washington (CREW), is "a big deal."
"It means more and more members are feeling pressured to take a stand on this," the group said. "Let's keep the pressure up!"
CREW had urged Pelosi to back bipartisan legislation to prohibit members of Congress and their spouses from trading or owning individual stocks. In a statement last month, CREW president Noah Bookbinder said that "members of Congress in both parties are consistently failing to comply with the STOCK Act, making it clear that our current disclosure laws are not enough."
"These violations of the law, and the constant possibility of more serious violations," he added, "will continue to undermine the public's faith in Congress's ethics. Speaker Pelosi has been a leader on ethics and democracy issues and, in that vein, should now commit to supporting comprehensive legislation that would end congressional stock trading and ownership."
A recent analysis estimated that members of Congress and their family members traded roughly $355 million worth of shares in prominent corporations in 2021, while Business Insider reported last week that 55 members of Congress didn't properly report their financial trades as required by the STOCK Act.
Earlier in January, Sen. Jon Ossoff (D-Ga.) introduced legislation to ban such trades—a proposal that's gathered a mere nine co-sponsors so far. Sen. Elizabeth Warren (D-Mass.) is also expected to soon put forth a bipartisan proposal to ban lawmakers and their spouses from trading stocks.
Rep. Raja Krishnamoorthi (D-Ill.), who helped lead bicameral and bipartisan legislation last year to prohibit such trades, said the need for the ban is clear.
"There is an unavoidable potential conflict of interest when Members of Congress and their top staffers trade in stocks while making decisions affecting the value of those stocks," he said at the time.