House Small Business Committee Chairman Rep. Sam Graves (R-Mo.) hailed passage of the Capital Access and Jobs Preservation Act by the House of Representatives on Wednesday as a move that would reduce troublesome regulations on private equity funds.
The measure would exempt small- and mid-sized private equity funds that often invest in small businesses from the SEC registration requirement of the Dodd-Frank Act.
“The Dodd-Frank Act creates excessive red tape that inhibits growth, and the costly new requirements on smaller private equity funds is a clear example,” Graves said. “(The Capital Access and Jobs Preservation Act) helps reduce that regulatory burden on private equity funds in a common-sense way so that private sector capital isn’t unnecessarily restricted and these funds can remain focused on investments that help grow the economy.”
Companies that are backed by private equity firms employ more than 7.5 million people at 17,700 firms that have invested more than $3.6 trillion over the last decade.
The House Small Business Subcommittee on Investigations, Oversight and Regulation examined the impact of the Dodd-Frank Act’s regulatory burdens on small financial institutions at a hearing on Tuesday.
The committee looked at the impact of the Consumer Financial Protection Bureau, Basel III capital standards and other financial regulations and concluded that “one-size-fits-all” regulations limit flexibility to make loans.