House Passes Bill Banning Insider Trading by Members of Congress WASHINGTON - The House of Representatives overwhelmingly passed a bill on Thursday to ban insider trading by members of Congress and to impose new ethics requirements on lawmakers and federal agency officials. The 417-to-2 vote came less than three weeks after President Obama demanded such action in his State of the Union address. The Senate approved a similar bill by a vote of 96 to 3 on Feb. 2, but the lopsided votes concealed deep disagreements over the details of the legislation. The swift response and the debate in both chambers showed lawmakers defensive and anxious about the low esteem in which Congress is held. The public approval rating of Congress has sunk below 15 percent. "We need to stop the insidious practice of insider trading, giving members of this body an unfair advantage over Americans who sent us here to represent them," said Representative Kathy Hochul, Democrat of New York. Let us begin the long process of restoring the faith of the American people in this institution. The bill now goes back to the Senate. The two chambers could try to work out their differences in a conference committee or through informal negotiations. Democrats said that House Republican leaders had weakened the Senate-passed bill by stripping out a provision that would, for the first time, regulate firms that collect "political intelligence" for hedge funds, mutual funds and other investors. Under the Senate bill, such firms would have to register and report their activities, as lobbyists do. In place of this requirement, the House version of the bill calls for a study of whether to require registration of people who collect political intelligence for the use of investors. Representative Louise M. Slaughter, Democrat of New York, who has been pushing ethics legislation since 2006, said that House Republican leaders apparently "could not stomach pressure from the political intelligence community, which is unregulated and unseen and operates in the dark." Senator Charles E. Grassley, Republican of Iowa, who wrote the proposed disclosure requirement for political intelligence firms, said it was "astonishing and extremely disappointing that the House would fulfill Wall Street's wishes by killing this provision." However, the House Republican leader, Representative Eric Cantor of Virginia, said the political intelligence section of the Senate bill was flawed. "That provision raises an awful lot of questions," Mr. Cantor said Thursday on the House floor. There is a lot of discussion and debate about who and what would qualify and fall under the suggested language that came from the Senate. That is why we are calling for a study of the issue. The House Democratic leader, Representative Nancy Pelosi of California, said the House-passed bill had "serious shortcomings" and was "much diminished" from the Senate version. She supported it, as a way to advance the legislation, but said, "I don't want anybody to interpret the strong vote for it as a seal of approval." Some Republicans described the bill as an overreaction, but voted for it anyway, saying they could not easily explain their concerns to a restive public. In the Senate, the bill - the Stop Trading on Congressional Knowledge Act, or Stock Act - was written by members of both parties. In the House, it was revised by Republican leaders, without consulting Democrats, and it was considered on the House floor in a way that precluded amendments. House Republicans had their own reasons for supporting the bill. Representative Lamar Smith, Republican of Texas and chairman of the House Judiciary Committee, said: "The risk of government self-dealing is heightened by the huge growth in recent years of the federal government and its increasing entanglement with the private economy. Big government can move markets. That's why we need strong rules to make sure policy makers are not enriching themselves by the use of insider information. Moreover, the bill requires members of Congress to disclose the purchase or sale of stocks, bonds, commodities futures and other securities within 30 to 45 days of transactions. A similar disclosure requirement would apply to thousands of federal employees in the executive branch, including the White House, cabinet departments and independent agencies. The House added a provision to prohibit members of Congress, their aides and executive branch officials from receiving special access to initial public stock offerings because of their positions. Republicans said this provision was inspired by an investment in 2008 by Ms. Pelosi, who was then the speaker of the House. The legislation, as passed by both houses, would cut off federal pensions for members of Congress convicted of felonies involving public corruption. Ms. Slaughter and Representative Tim Walz, Democrat of Minnesota, led the charge for the legislation in the House. "The perception is that members of Congress are enriching themselves," Mr. Walz said. That's not only an affront to our neighbors, that we are not playing by the rules. It is a cancer that can destroy the democracy. Federal securities law does not explicitly exempt members of Congress, but experts disagree on whether and when lawmakers may be found to have violated the law.