WHEREAS, An analysis of the median family wealth shows that Hispanic families have just 21 cents in generational wealth for every dollar in a median White household in a similar economic strata. For African Americans, the numbers are even starker, with African American families having just 12 cents to the dollar of their White peers; and

WHEREAS, The persistent minority wealth gap results from many factors, not the least of which are structural barriers to financial advancement, like the financial means test associated with who may become an “accredited investor,” as that term is used by the United States Securities and Exchange Commission (SEC); and

WHEREAS, Many of the most lucrative investment opportunities are hidden from the general public behind an outdated and ill-conceived means testing process, termed SEC Rule 501 or “Accredited Investor and Qualified Purchaser” regulations. These regulations have the effect of preventing those without significant financial means from participating in pre-Initial Public Offerings (IPOs) and other investments that historically represent the most lucrative of investment opportunities; and

WHEREAS, Recently, the SEC recognized that the Rule 501 means test on personal investment opportunities was not an appropriate way of protecting retail investors from investment scams. The SEC has proposed that a second method of achieving Accredited Investor status might be a certification achieved by graduating from a school possessing a specialized credential; and

WHEREAS, Requiring those seeking to better their lives through financial investment to attend a special school would only serve to increase personal debt through student loans and would decrease the likelihood that disadvantaged communities, who most need the opportunity, would have access to it. And it ignores the realities of the modern education and investment landscape; and

WHEREAS, Just as many families are moving from the traditional institutional education model to a home-schooling model, many retail investors are also choosing to learn their craft at their own pace through free or very low cost online platforms. The proposed change to a gate-kept, specialized credential school would do nothing to enhance investor protection and would further marginalize the disadvantaged community of retail investors; and

WHEREAS, Ostensibly removing a barrier to advancement only to replace it with a locked gate is not a solution; and

WHEREAS, Californians agree that retail investors should be protected from predatory investment scams; however, a onetime certification can rapidly grow stale in an ever-changing landscape, just as a discriminatory means test does absolutely nothing to protect retail investors; and

WHEREAS, California’s diversity is one of its greatest strengths and barriers that target the financial opportunities of the disadvantaged are anathema to the American dream. All Californians deserve a chance to improve their personal financial position and we call upon the federal government to ensure that the path is free, fair, and clear; now, therefore, be it