[B0Z]

One of the things The Securities Act of '33 was established to do was to protect the general public from themselves and from predatory brokers who were loaning a generally ignorant public caught up in speculative bubbles. Brokers were lending people up to 2/3rds of the face value of stock they were purchasing. When the market started to get cold feet and rumors ran rampant, people were selling every stock they owned just to cover the amount they were leveraged.

I haven't read the bill before Congress, but I would think if there are provisions that prohibit borrowing as a mechanism for financing stock purchases, this would benefit the start up ecosystem. The system in it's current state only benefits the very, very wealthy, and forces young start ups into term negotiations with people who do it for a living.

Methinks there is / will be heavy lobbying on behalf of the major investment banks who would naturally oppose any new members in their club.

http://en.wikipedia.org/wiki/Wall_Street_Crash_1929