SEC loses power to police broker conduct and arbitration clauses

What it does

This bill repeals three SEC authorities granted under Dodd-Frank: (1) the power to restrict mandatory predispute arbitration clauses in securities contracts, (2) the power to impose fiduciary duties on brokers and investment advisers beyond existing standards, and (3) the power to set standards of conduct for securities professionals. The net effect is to block the SEC from using these tools to regulate broker-dealer conduct and arbitration practices, shifting power away from regulatory oversight and toward industry self-regulation and contractual freedom.

Why we flagged it

The bill's operative mechanism is the repeal of three SEC regulatory authorities that constrain broker-dealer conduct and investor arbitration. It is functionally a deregulation measure, not a restriction on unused power—the cited authorities were actively used or available for use under Dodd-Frank.

What the text implies

• Mandatory arbitration clauses in securities contracts can no longer be restricted by the SEC, eliminating a key tool to preserve class-action rights for retail investors and forcing individual arbitration even for systemic fraud.
• Brokers and investment advisers lose SEC authority to impose fiduciary duties beyond the baseline, allowing conflicts of interest to persist where Dodd-Frank had expanded protections.
• The SEC loses authority to set conduct standards for securities professionals, ceding standard-setting to self-regulatory organizations (SROs) and industry bodies with weaker enforcement incentives.
• The title 'Business Owners Protection Act' frames the bill as pro-small-business, but the beneficiaries are financial firms and brokers, not small-business owners—the framing obscures the actual regulatory target.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

Ordinary investors lose regulatory protections: the SEC can no longer restrict mandatory arbitration clauses that bar class actions, cannot impose heightened fiduciary duties on brokers, and cannot set conduct standards beyond existing law. These were tools designed to protect retail investors from conflicts of interest and forced arbitration; their removal shifts leverage toward financial firms and away from investor remedies.

Who stands to gain

• broker-dealers
• investment advisers
• financial services firms
• arbitration service providers

Named in the bill

Securities and Exchange Commission (SEC), Dodd-Frank Wall Street Reform and Consumer Protection Act, Securities Exchange Act of 1934, Investment Advisers Act of 1940, Investor Protection and Securities Reform Act of 2010, self-regulatory organizations (SROs)

Where it stands

7 cosponsors: 7 Republicans.

• May 19, 2025 — Introduced · Congress.gov: “Introduced in House”
• May 19, 2025 — Referred to House Committee on Financial Services · Congress.gov: “Referred to the House Committee on Financial Services”
• Sep 16, 2025 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• Sep 16, 2025 — Reported out of committee · Congress.gov: “Ordered to be Reported (Amended) by the Yeas and Nays: 26 - 24”

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 4 disclosure filings across 2 quarters, Dec 2025 to Jun 2026. Those filings disclosed $1,195,758 in lobbying spend. A filing names 64 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.

Andy Barr, the sponsor, reported $2,160,072 in PAC receipts in the 2026 cycle.

• National Association of Mutual Insurance Companies — $1,005,758 on 2 filings
• Fisher Investments — $190,000 on 2 filings

Lobbying Disclosure Act filings through Jul 20, 2026. A filing shows who paid to lobby on a bill it names, not what changed.