Jayapal, Warren, Lawmakers Announce Reintroduction of Comprehensive Stop Wall Street Looting Act

Text of bill can be found here.

Washington, D.C. – Today, Representatives Pramila Jayapal (D-Wash.), Mark Pocan (D-Wis.), Greg Landsman (D-Ohio), , Jesús “Chuy” García (D-Ill.), Alexandria Ocasio-Cortez (D-N.Y.), Ilhan Omar (D-Minn.), Delia Ramirez (D-Ill.), Rashida Tlaib (D-Mich.), and Delegate Eleanor Holmes Norton (D-D.C.), along with Senators Elizabeth Warren (D-Mass.), Tammy Baldwin (D-Wis.), Richard Blumenthal (D-Conn.), Ed Markey (D-Mass.), Jeff Merkley (D-Ore.), Bernie Sanders (I-Vt.), and Tina Smith (D-Minn.), reintroduced the Stop Wall Street Looting Act, comprehensive legislation to fundamentally reform the private equity industry and level the playing field by forcing private investment firms to take responsibility for the outcomes of companies they take over, and by empowering workers and protecting investors.

The legislation would make private equity firms responsible for the debts of the companies they control, while cracking down on practices that allow private equity firms to load companies with debt, extract profits from them, and walk away scot-free when those companies fail. The bill would also strengthen protections for workers and consumers, require private equity firms to disclose more information about the management and advisory fees they charge, and place guardrails on firms that receive taxpayer funds. Finally, it would limit the role of real estate investment trusts (REITs) in health care and eliminate certain tax benefits for REIT investors.

This re-introduction follows the landmark bipartisan 21st Century ROAD to Housing Act’s becoming law this summer – the first-ever legislation to rein in private equity. The law stops private equity and other corporate landlords from buying up single-family homes.

“Too many companies that people love and depend on, including nursing homes and grocery stores, have fallen victim to private equity,” said Representative Jayapal. “Wall Street private equity firms claim to improve efficiency, but often they rip apart brands, wrack up debt, and abandon workers, communities, and investors. We have to stop this multitrillion-dollar industry from getting away with this, and our bill does that by making private equity firms responsible for the outcomes of their takeovers and protecting workers from corporate greed. We must stop Wall Street looting and put people over profits.”

“Far too often, private equity firms will buy these companies, load them up with debt, and then lay off a ton of workers – all to produce huge returns for their super-wealthy investors,” Representative Landsman said. “Our bill will hold these firms accountable so we can protect jobs and businesses for hardworking Americans.”

“It’s long past time for billionaires and big corporations to stop gambling with hardworking Americans’ and their communities’ assets in service of corporate greed,” said Representative Pocan. “In Wisconsin, we’ve seen what happens when private equity firms like Sun Capital raid companies for their wealth and leave workers and communities to pick up the pieces. When Sun Capital took over Shopko – a Wisconsin-based retail chain that had stood strong for more than 50 years – they drained it dry, buried it in debt, pushed it into bankruptcy, and abandoned roughly 14,000 workers. This bill will finally hold these predatory firms accountable and protect workers from being plundered by corporate greed.”

“This year, Congress proved with our bipartisan housing law that we can stop private equity from rolling through industry after industry, jacking up prices and leaving businesses and workers in the dust,” said Senator Warren. “TheStop Wall Street Looting Act takes a stand against private equity’s legal looting and puts power back in the hands of workers and consumers.”

“In places like Janesville, Waukesha, and Green Bay, we have seen out-of-state investors buy Wisconsin businesses, raid them, and then shutter their doors—leaving Wisconsin workers and communities to suffer,” said Senator Baldwin. “Our legislation takes on private equity and Wall Street’s greed and better protects our Wisconsin workers from these predatory practices.”

“More and more, private equity is taking over various aspects of American life, bringing its harmful playbook to essential industries—including housing, health care, child care, and local newspapers,” said Senator Merkley. “Corporations need to be responsible when private equity prioritizes shareholders’ profits at the expense of service, quality, and good-paying jobs.”

“Private equity companies often come into communities promising to revitalize businesses or turn around struggling hospitals. But we routinely see them extract maximum value for themselves at the expense of workers and ordinary people, ” said Senator Smith. “This legislation will hold private equity companies accountable and put an end some of their most egregious practices.”

Since 2020, private equity fund assets have grown exponentially, reaching over $9 trillion in 2025 compared to $4.5 trillion in 2020. Private equity funds have purchased companies in nearly every sector of the economy — from nursing homes, to newspapers, to grocery stores — laying off hundreds of thousands of workers and ruining thousands of companies in the process.

The private equity industry claims to invest in companies while also earning high returns for investors by using their management expertise to make the companies’ operations more efficient, and then selling the companies at a profit. In reality, private equity funds often load mountains of debt on the companies they buy, strip them of their assets, and extract exorbitant fees and dividends, guaranteeing payouts for themselves regardless of how the investment performs. When their debt-ridden investments go belly-up, private equity funds walk away with no responsibility for the mess they create, leaving workers in the lurch and forcing communities to clean up their mess.

The Stop Wall Street Looting Act will:

Require Private Investment Funds to Have Skin in the Game. Private equity firms, the firm’s general partners, and their insiders will all be on the hook for the liabilities of companies under their control—including debt, legal judgments, and pension-related obligations—to better align the incentives of private equity firms and the companies they own. Liability would not extend to the fund’s limited partners, ensuring that only those that control portfolio firms are on the hook. In order to encourage more responsible use of debt, the bill ends the tax subsidy for excessive leverage and closes the carried interest loophole.

End Looting of Portfolio Companies. To give portfolio companies a shot at success, the bill limits how much money private equity firms can extract from companies and closes the loophole that private equity firms have used to hide certain assets from bankruptcy courts. Every transaction since Steward Health Care was bought by private equity would be subject to review as part of Steward’s bankruptcy to determine whether it can be clawed back as a fraudulent transfer.

Protect Workers, Customers and Communities. This proposal prevents private equity firms from walking away when a company fails and protects workers and communities by:

• Prioritizing workers’ pay in the bankruptcy process and amending the laws to increase the priority claims for unpaid earnings and other benefits from $10,000 to $20,000 per worker.
• Creating incentives for job retention so that workers can benefit from a company’s second chance.
• Ending the immunity of private equity firms from legal liability when their portfolio companies break the law, including the WARN Act. When workers at a plant are shortchanged or residents at a nursing home are hurt because private equity firms force portfolio companies to cut corners, the firm should be liable.
• Expanding protections for striking workers by clarifying unfair labor practices and the employer duty to bargain.

Empower Investors by Increasing Transparency. Private equity managers will be required to disclose fees, returns, and other information about their funds and the corporate loans they make so that investors can monitor their investments. This would have required Cerberus to disclose the terms of its investments in Steward Health Care, which Cerberus continues to withhold from Congress.

Put Guardrails Around Accessing Public Funds. Firms receiving any funds from a federal or state agency must publicly disclose how the funds are used and will be prohibited from acquiring any company or making a distribution to investors for two years after receipt.

Drive REITS out of Health Care. Prohibits payments from federal health programs to entities that sell assets or use assets for a loan collateral made to a Real Estate Investment Trust (REIT) d; repeals a rule in the Tax Code that allows taxable REIT subsidiaries to exert influence on the operations of health care entities; and removes the 20 percent pass-through deduction, passed in the 2017 Trump tax cuts, for all REIT investors. Ralph de la Torre executed a sale-leaseback transaction of the Steward properties in exchange for a $1.25B payout from a REIT; this would have banned the hospitals from continuing to receive federal dollars upon executing the property sale—thus likely preventing the sale.

The bill is supported by ACRE-BCG, AFL-CIO, Americans for Financial Reform, American Center for Economic and Policy Research, Communication Workers of America, Demand Progress, Economic Liberties Project, American Federation of Teachers, Center for Popular Democracy, Community Catalyst, Community Change Action, Economic Policy Institute, Future of Music, Indivisible, National Nurses United, National Consumer Voice for Quality Long-Term Care, National Women’s Law Center Action Fund, Open Markets Institute, People’s Action Institute, Players Alliance HQ, Private Equity Stakeholder Project, Public Citizen, SEIU, Strong For All Coalition, Student Borrower Protection Center, Take on Wall Street, UNITE HERE, and United for Respect.

“The Stop Wall Street Looting Act would put workers and their communities first — above private equity companies that make it a sport to buy and sell companies, raise prices and sell off what remains for parts. We deserve better and holding Wall Street accountable is a critical step toward correcting its unchecked power over our lives, homes and jobs,” said Saqib Bhatti, Executive Director of the Action Center on Race & the Economy and the Bargaining for the Common Good Network (ACRE-BCG)

“Private equity has gotten away with a heads-I-win, tails-you-lose business model for far too long. They take control of businesses, bury them in debt, strip out assets, fees, and dividends, and walk away richer, while workers lose their jobs, consumers pay more, and communities lose essential businesses and services. Families are already struggling to afford basic needs—the last thing they need is more of the economy organized around Wall Street extraction,” saidOscar Valdés Viera, Americans for Financial Reform Senior Policy Analyst. “The Stop Wall Street Looting Act would break this business model and make private equity firms answer for the risks they create and the damage they leave behind. That accountability is especially urgent as the Trump administration moves to include private equity in workers’ 401(k) retirement accounts. Workers should not be forced to risk their jobs, their communities, and now their retirement savings to subsidize Wall Street’s destructive business model.”

“Here at Economic Liberties we’ve documented what happens when private equity takes over the institutions people depend on. Hospitals are gutted, physician practices are squeezed for fees and forced to cut corners and patients wait longer for worse care. The firms engineering this destruction have been legally insulated from the consequences. The Stop Wall Street Looting Act ends this arrangement,” said Morgan Harper, Director of Policy and Advocacy at the American Economic Liberties Project. “If you control a company, you’re responsible for what it does. That principle is essential to breaking up Big Medicine, but really to protecting workers and communities in every sector private equity has strip-mined.”

“This is exactly the type of leadership that our legislators need to exhibit right now! We all must stand up to Wall Street and private equity’s attack on our economy and democracy,” said DaMareo Cooper, Executive Director of the Center for Popular Democracy. “It is the role and responsibility of those who have taken the oath of office to stand up against predatory corporations and protect the life and liberty of workers and consumers.”

“When entities prioritize revenue over the health and economic well-being of the communities they serve, healthcare rapidly becomes out of reach; both geographically when healthcare facilities in neighborhoods close, and economically when people get squeezed for every cent,” said Shaina Goodman, Vice President of Policy and Government Affairs at Community Catalyst. “We are grateful to the bloc of legislators sponsoring the Stop Wall Street Looting Act to start addressing the pernicious effects private equity control of healthcare facilities is having on communities nationwide.”

“The private equity lobby claims to ‘build better businesses’ and deliver strong returns for workers’ retirements. Don’t believe it. The private equity model isn’t about efficiency gains — it’s about exploiting tax loopholes and regulatory gaps, saddling businesses with debt, and stripping their assets,” said Economic Policy Institute President Heidi Shierholz. “It’s a ‘heads I win, tails you lose’ bet, and workers, suppliers and communities are left holding the wreckage when it fails. And the risks are growing as private equity expands and these high-cost, risky, opaque investments get pushed onto 401(k) savers. The Stop Wall Street Looting Act is essential legislation to address a looming threat to workers’ retirements and to our economy.”

“Musicians have seen extractive private equity creep into every corner of our industry, propping up predatory ticket resale business models, gobbling up recordings and publishing rights, squeezing the life out of local radio, print and web journalism, and asset stripping crucial businesses like instrument retailers and gear manufacturers all the way into bankruptcy. Congress can put an end to this extraction, so executives bear responsibility rather than shifting the harm onto workers and music fans,” said Executive Director of the Future of Music Coalition, Kevin Erickson.

“We are facing a crisis in this country of companies being starved by their private fund owners of the capital they need to protect the safety and wellbeing of their workers and customers,” said Audrey Stienon, Industrial Policy Program Manager at Open Markets Institute. “It is imperative that those with the ultimate power to influence companies’ actions also be held accountable for the impacts of those actions on American people and communities.”

“The gaming industry isn’t dying, it’s being drained for all it’s worth. Private equity buys studios with no intention of making a good product. To private equity firms, these companies are just another way to squeeze money out of other people’s work while hanging workers and consumers out to dry,” said Chris Nunn, Member Leader, Players Alliance HQ. We just watched this with the EA buyout. This cannot become the new norm. Games should belong to the people who make them and the gamers who play them, not private equity. This is why we gamers support the Stop Wall Street Looting Act.”

“The Stop Wall Street Looting Act’s reintroduction comes at a critical time in our nation’s history. As most of the country struggles with affordability, private equity firms continue to extract wealth from our families and communities,” said Chris Noble, Policy Director for the Private Equity Stakeholder Project. “Wall Street’s never-ending pursuit of profits and lack of accountability has not only bankrupted companies, it has also harmed our democracy. By passing SWSLA, Congress can establish the type of oversight of private markets that befits a democratic society.”

“We all pay the price when private equity’s predatory practices go unchecked in our communities. Companies prioritizing profits over people have decimated nursing homes, closed the doors to community hospitals and other facilities and made it harder for healthcare workers to advocate for their patients through unions,” said SEIU Executive Vice President Leslie Frane. Working people are fed up, and we’re putting that anger to work to unrig a system that has allowed private equity to put profits ahead of working families and our communities. That is why SEIU members are urging Congress to pass the Stop Wall Street Looting Act so we can hold private equity accountable.”

“On one side of our country, families are being crushed by the rising cost of food, healthcare, utilities, and everyday needs. Hundreds of thousands have been laid off,” said Charles Khan, Deputy Director of the Strong Economy For All Coalition. On the other side, ruthless and greedy Wall Street billionaires and their private equity firms are looting large and small businesses to get rich while everyone else pays the true costs. It’s time for our government to stand up for workers and our families against the billionaires. We need the Stop Wall Street Looting Act ASAP.”

“The Stop Wall Street Looting Act removes the ability of private equity funds to extract cash from companies they acquire via sale-leaseback deals, dividend recapitalizations, and monitoring fees,” said Eileen Appelbaum, Co-Director of the Center for Economic and Policy Research. “These legal but unscrupulous practices enrich PE firms and their investors. But they undermine the financial stability of the companies they acquire g, squeeze their workers, and reduce the quality of their products and services, hurting employees, customers, and communities.”

“Private equity roll-ups are a proven source of anticompetitive behavior throughout the American economy,” said Carter Dougherty, Senior Fellow for Antimonopoly and Finance at Demand Progress. “This predatory strategy results in less competition and choice — and higher costs — for consumers and the economy as a whole.”

“Consumer Voice strongly supports the Stop Wall Street Looting Act. Too often, private equity firms have bought nursing homes, sold off the buildings, loaded the operators with debt, and taken fees and dividends while residents lived with too few staff and worse care. When the facility fails, the residents and workers pay for it, and the investors walk away. This bill would make the funds that control these facilities answerable for what happens in them. Residents deserve owners with a real stake in their care,” said the National Consumer Voice for Quality Long-Term Care.

Issues: Jobs, Labor, & the Economy