Congressional stock trading curb due to get House vote amid public support for a ban

The U.S. House is due to take up legislation Wednesday afternoon that would stop members of Congress from buying individual stocks while in office, potentially taking the first meaningful action on an issue that has dogged lawmakers for years.

There is broad public support for a ban on members of Congress trading while in office, as lawmakers' well-timed trades and booming portfolios have raised insider trading concerns among ethics watchdogs and drawn intense public scrutiny going back decades.

But the GOP-led legislation before the House, dubbed the Stop Insider Trading Act, falls well short of what the most vocal advocates of a congressional trading ban have called for. And Democrats are lining up against the proposal.

"I'm very disappointed in it. It's a stock trading ban that still allows stock trading. It's a weak bill," Rep. Seth Magaziner, D-R.I., part of a bipartisan coalition that has advocated for a more thorough ban, told CNBC.

House Republicans also attached a voter-identification provision to the measure, making any Democratic support it might have gotten less likely and complicating its path to passage. President Donald Trump has been pressing Congress to approve the SAVE America Act, which would impose voter-ID and proof of citizenship requirements on voters across the U.S. The measure lacks support to clear Congress.

If the stock trading bill with the voter-ID mandate included advances to the Senate, where most bills require 60 votes to overcome a filibuster, its fate is unclear.

A 2012 federal law already makes it illegal for members of Congress to trade on inside information, but the penalties associated with that law are weak and rarely, if ever, enforced.

The legislation being voted on Wednesday, introduced by Rep. Bryan Steil, R-Wis., would bar members of Congress from buying individual stocks while in office, but would not require them to divest their existing investments in individual company shares. It would also allow members to sell parts of their portfolio, provided they publicly disclose their intent to sell at least seven days before.

The bill would also increase penalties for members who fail to properly disclose sales of stock, assessing fines of $2,000 or 10% of the value of the transaction, whichever is greater. The current penalty for disclosure violations is $200 for first-time offenders.

"I think it's really important that we tell the American people we're done allowing members of Congress to be day-trading stocks," Steil said in an appearance on CNBC's "Squawk Box" on Wednesday ahead of the vote. "Let's remove even the appearance of impropriety that any given trade is based on any inside information an individual may gain while serving in Washington."