Chairman Scott: Opportunity Should Not Be Determined by Your Zip Code

Washington, D.C. — Today, Senate Banking Committee Chairman Tim Scott (R-S.C.) held a hearing on capital formation and how to make it easier for entrepreneurs, small businesses, growing companies, and everyday investors to build opportunity in America. Chairman Scott emphasized that capital formation is about giving Main Street businesses and everyday investors the tools to turn good ideas into jobs, growth, and stronger communities. He also highlighted his leadership on priorities that will expand investment opportunities, help companies go public and stay public, improve access to capital for small and medium-sized businesses, and update his capital formation package by building commonsense proposals from members on both sides of the dais.

Chairman Scott’s opening remarks as delivered:

Good morning. I call this hearing to order.

Today, the Committee meets to discuss how we can make it easier for entrepreneurs, small businesses, growing companies, and everyday investors to build opportunity in America through capital formation.

Capital formation may sound like a Wall Street term, but at its core, this is about Main Street in America.

It gives local businesses and everyday investors the tools to turn good ideas into jobs, growth, and a stronger future for their own communities.

The best ideas in America do not come from just New York, San Francisco, or a handful of other communities.

They come from places in South Carolina like Ladson, Irmo, Simpsonville and communities all across America.

But too often, access to capital is concentrated in too few places and in too few hands.

That means an entrepreneur in South Carolina may have a harder time accessing capital than someone with the same idea in Silicon Valley.

That should not be the case.

Opportunity should not be dictated by your zip code.

And it should not take wealth to create wealth.

My priorities are simple.

To expand investment opportunities for everyday Americans and increase wealth outside of the hands of the concentrated few.

To do this, we need to help companies go public and stay public.

And we need to help small and medium-sized businesses access the capital they need to grow, hire, and compete.

That’s good news in so many ways, and it is not starting from scratch.

Last Congress, I introduced the Empowering Main Street in America Act (EMSAA) because too many Americans lacked access to our capital markets.

EMSAA would have expanded the ways everyday Americans can invest in growing businesses, and it would have tailored regulations for companies at every stage of growth, from a startup and beyond.

Since then, members on both sides of the aisle have also put forward commonsense proposals that can help move us in the right direction.

I’ve teamed up with Senator Warner on legislation to help emerging growth companies (EGCs) scale and ultimately access the public market.

Senator Britt has introduced legislation, cosponsored by Senator Warnock, to level the playing field between 403(b) and 401(k) plans, giving 15 million nonprofit employees, from hospital workers to teachers, access to the same lower-cost investment options as everyday 401(k) savers.

Already, thirteen members of this Committee have signed on as cosponsors.

Senator McCormick and Senator Alsobrooks have introduced legislation to eliminate red tape that inflates the reported costs of business development companies (BDCs), making it more attractive for investors to put capital into the small and middle-market businesses that BDCs are built to serve.

And there are more ideas we can build on.

That is why this Committee is working to update my capital formation package that I put together.

Our capital markets should help a company grow from an idea to a small business, from a small business to a larger employer, and maybe one day to the next great public company.

That is the point of today’s hearing.

We want to hear from our witnesses about what is working, what is not working, and where Congress should focus our attention to make capital formation even easier.

This Committee has shown, time and time again, that we can work together on serious issues that matter to the American people.

Helping a small business grow is not about politics.

Giving families a chance to invest is not partisan.

Keeping America the best place in the world to build the future should not be controversial.

Capital formation should unite us. So, today, let’s focus on practical solutions for every community, not just a few zip codes.

I look forward to hearing the testimony from our witnesses.