Summary

Creates a new federally licensed program that lets specially chartered "ownership investment companies" raise private capital and receive Department-backed guarantees and other leverage to invest in employee-owned firms and worker cooperatives. The bill sets licensing rules, investor and management suitability standards, ongoing reporting and audits, enforcement powers (fines, suspension, receivership), limits on single-company exposure, a Protégé program for inexperienced managers, and a $5 billion annual cap on Department leverage with a 20-year sunset on new licenses. Establishes SEC and Department rulemaking authority and procedures for issuing guarantees and trust certificates, requires annual reporting to Congress, and imposes detailed governance, conflict-of-interest, valuation, and licensing requirements intended to protect investors and the government while promoting employee ownership.

Key Points

• Creates a licensed federal program for 'ownership investment companies' to finance employee ownership and worker cooperatives using private capital plus Department-backed guarantees.
• Imposes a $5 billion annual cap on Department leverage and a 20-year sunset on new licenses.
• Requires licensees to hold at least $10 million in private capital and limits single-company exposure to 10% of a defined base without Secretary approval.
• Gives the Department broad oversight and enforcement powers: examinations, subpoenas, audits, suspension/revocation, fines, and receivership authority.
• Establishes conflicts-of-interest rules, management suitability standards, and disqualification rules for persons with certain criminal or civil fraud histories.
• Authorizes the SEC to exempt certain OIC securities from specific securities laws under conditions that protect investors and the public interest.
• Creates trust certificates and Department guarantees with full faith-and-credit backing, central registration, and broker/dealer regulation.
• Provides a Protégé program to let experienced managers mentor and partially invest in new OICs, with special rules and oversight.
• Requires detailed annual reporting to Congress on program performance, losses, exposure, and forecasts.
• Imposes civil penalties for filing failures and allows the Secretary discretion to waive penalties or set alternative requirements.

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