WASHINGTON (Reuters) ? Federal lawmakers expressed bipartisan support on Wednesday for several legislative proposals to ease regulatory burdens for small companies struggling to raise capital in the face of a battered economy.
At a hearing before a House Financial Services panel, Democrats and Republicans said momentum is growing toward enacting at least some proposals that would modernize securities laws governing issues such as registration and filing requirements, as well as the triggers for a company to go public.
"I agree we should be moving in the direction of reducing unnecessary regulations on particularly smaller entities," said House Financial Services Ranking Democrat Barney Frank.
The bipartisan tone at Wednesday's hearing is a stark contrast to the rancorous debates over the scope and costs imposed on businesses by last year's Dodd-Frank Wall Street overhaul law.
The discussion over whether to loosen capital-raising restrictions gained momentum earlier this year after Goldman Sachs Group Inc decided to exclude U.S. investors from an offering of Facebook shares due to concerns about running afoul of outdated rules on general solicitation. The decision by Goldman sparked a debate in Washington and helped spur the Securities and Exchange Commission to review its securities offering rules.
Recently, the agency launched a new small business advisory committee to explore policy issues such as whether to raise the thresholds that trigger a company going public and easing rules to permit "crowd funding" -- a capital-raising strategy that lets investors take small stakes in private start-ups over the Internet.
Meredith Cross, the SEC's director of corporation finance, testified on Wednesday that the agency has not yet taken a position on the various bills, but acknowledged there are "a number of very important ideas" in them.
One legislative proposal is a bill previously approved by the House Financial Services Committee that would make it easier for companies to take advantage of the SEC's "Regulation A" exemption, which permits them to avoid filing costly and time-consuming paperwork.
A similar bipartisan measure has already been introduced in the Senate and Frank said the House version will put to a floor vote soon.
Other proposals that received fairly broad support include two related bills that would raise the threshold for the number of "shareholders of record" a company has before it must start filing financial disclosures.
One bill would broadly impact all kinds of companies by raising the threshold to 1,000 shareholders from the current 500. Another is more narrowly tailored to help small banks avoid triggering the reporting requirements.
Still, some Democrats suggested there is work to be done to tackle some lingering disagreements, such as exactly how to craft exemptions permitting crowd funding -- a concept that has been supported by Republicans as well as President Barack Obama in his recent jobs plan.
Under one legislative plan floated by Republican Representative Patrick McHenry, crowd funding would be permitted by letting companies pool donations up to $5 million without registering with the SEC.
Frank said he supports the concept of the bill, but noted there is "room for debate" about the proposed $5 million threshold. But he added: "I generally agree with the thrust of increasing it."
(Reporting by Sarah N. Lynch; editing by Andre Grenon)
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