ROBINHOOD Act

What happened: On December 4, 2025, Rep. Daniel Goldman (D-NY) introduced HR6438, the ROBINHOOD Act, which adds a 20% excise tax on securities-based loans and lines of credit for individuals with adjusted gross income above $400,000 ($450,000 joint). The bill explicitly excludes residential mortgages, home equity products, margin loans, and farmland-secured loans. The bill has been referred to the House Ways and Means Committee and has 7 cosponsors. It is in very early legislative stage with no hearings scheduled. The money trail: This bill is a TAX BILL, not an authorization or appropriation. It creates a new revenue stream for the federal government (tax payments from borrowers) but does not allocate any funding to programs. The affected sector — wealth management banks — loses revenue because the 20% borrower-side tax makes securities-based lending uneconomical. The tax is collected by the IRS from borrowers, not from banks directly. However, the consequence for banks is the near-elimination of new origination volume for this specific product line. Structural winners and losers: The clear losers are the three banks with the largest securities-based lending books within wealth management: Goldman Sachs ($GS), Morgan Stanley ($MS), and JPMorgan ($JPM). This product is particularly important to GS and MS because their wealth management units are a higher percentage of total firm revenue compared to JPMorgan. Exempt products (margin loans, residential mortgages, home equity lines) gain relative competitiveness. Banks with smaller wealth management operations like Bank of America ($BAC) or Wells Fargo ($WFC) are less impacted, and retail-focused banks are unaffected. The margin loan exemption is critical: this bill specifically penalizes securities-based lending where the loan amount is based on asset value, while traditional margin loans (regulated by Regulation T and FINRA) are exempt. This creates a regulatory arbitrage opportunity, but the practical impact depends on how the IRS defines the distinction. Real market data analysis: As of April 30, 2026, there is NO observable market impact from this bill. GS at $920.37 (30-day +8.79%, 52-week high $984.70), MS at $188.86 (30-day +14.76%, 52-week high $194.59), and JPM at $312.85 (30-day +6.35%, 52-week high $337.25) are all near their 52-week highs and have positive 30-day momentum. The bill was introduced 5 months ago and is in early-stage committee referral with no hearings. The market correctly prices this as very low probability in the current Congress. However, the structural risk is real if Democrats gain control of the House and/or Senate and Presidency in the 2026 midterms. This is a bill to monitor for the 2027-2028 period. Timeline: The bill is in the House Ways and Means Committee, which is the only committee of referral. No hearings, no markup, no CBO score. For passage, it would need: (1) committee markup and approval, (2) House floor vote, (3) Senate Finance Committee action, (4) Senate floor vote, (5) presidential signature or veto override. In the 119th Congress (2025-2027) with a Republican House and Democratic Senate, the probability of passage is near zero. The bill is a messaging vehicle and a marker for future Democratic control.