Congress moves to strip FINRA of all regulatory power, consolidate into SEC
H.R. 2689 — To amend the Securities Exchange Act of 1934 to transfer authorities and duties of registered national securities associations to the Securities and Exchange Commission. · Filed by Lisa McClain (R-MI) · Introduced Apr 7, 2025 · Referred to committee
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What it does
This bill transfers all regulatory authority and duties currently held by FINRA (the Financial Industry Regulatory Authority, a registered national securities association) to the SEC. Every function FINRA performs—rule-writing, member oversight, disciplinary actions, examinations—moves to the SEC. The SEC gets 2 years to write rules implementing the transfer before it takes effect.
Why we flagged it
The bill's sole operative mechanism is a structural transfer of regulatory authority from a private self-regulatory organization (FINRA) to a federal agency (SEC). This is a fundamental reorganization of securities-industry oversight, not a narrow carve-out or subsidy.
What the text implies
- FINRA's member-funded model (where securities firms pay for regulation) shifts to SEC appropriations; Congress controls the budget and may underfund enforcement, creating a hidden cost to market integrity.
- The 2-year transition period creates a regulatory vacuum: existing FINRA rules must be rewritten as SEC rules, and any gap in that process could leave market participants without clear guidance or enforcement authority.
- FINRA's arbitration system (FINRA Arbitration) would likely transfer to SEC control; this affects millions of investor disputes currently resolved outside courts, potentially changing dispute resolution timelines and outcomes.
- Elimination of FINRA's industry-embedded expertise and member governance structure removes a layer of peer oversight; SEC staff may lack real-time market knowledge that FINRA's member-firm representatives provide.
- The bill does not address FINRA's existing contractual obligations, pension liabilities, or property; the mechanics of winding down a $1B+ organization are not specified, creating implementation uncertainty.
Section numbers refer to the bill text the analysis read — linked under Primary records below.
Who it affects
Consolidating fragmented oversight into a single federal regulator may improve coordination and reduce regulatory arbitrage, potentially strengthening investor protections. However, FINRA's member-funded model and industry-embedded expertise would be replaced by SEC bureaucracy, and the transition risk—2 years to rewrite all rules—could create enforcement gaps or regulatory uncertainty that harms market stability and investor confidence.
Named in the bill
FINRA (Financial Industry Regulatory Authority), SEC (Securities and Exchange Commission), Securities Exchange Act of 1934, registered national securities associations, securities firms / broker-dealers
Where it stands
- Apr 7, 2025 — Introduced · Congress.gov: “Introduced in House”
- Apr 7, 2025 — Referred to House Committee on Financial Services · Congress.gov: “Referred to the House Committee on Financial Services”
Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.
Money around this bill
2 lobbying clients named this bill on 3 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $720,000 in lobbying spend. A filing names 4 bills on average, so that figure is what each filing reported, not a share belonging to this bill.
More lobbying clients named this bill than 41% of bills with at least one filing.
Lisa McClain, the sponsor, reported $1,545,787 in PAC receipts in the 2026 cycle. $7,000 of that came from 2 PACs tied to these lobbying clients.
- Financial Industry Regulatory Authority — $440,000 on 2 filings
- Ameriprise Financial, Inc. — $280,000 on 1 filing
Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.
How this was measured
Analysis — Quorum's AI read the bill text published by Congress.gov (1,204 characters) on May 21, 2026. Section numbers in the findings refer to that text, linked below; transparency and hidden-provision scores are compared against the median of 16,222 analysed bills.
Status and sponsors — Congress.gov's bill record — actions, committee referrals and cosponsors — loaded nightly. The timeline shows status changes, not every procedural action.
Money — Senate Lobbying Disclosure Act filings whose specific-issue field names this bill for quarters ending Dec 2025 to Jun 2026. A filing's amount is reported whole beside the median number of bills a filing names; it is never divided across them. PAC receipts are FEC-reported contributions to the sponsor's candidate committee in the 2026 cycle.
As of — lobbying records through Jul 20, 2026 · page rendered 2026-10-20.
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