ITHACA, NY (607NewsNow) – Congressman Josh Riley is trying to ensure quality daycare options for Upstate New Yorkers.
On July 22, Riley introduced the Protecting Childcare from Private Equity Act.
If passed, the bill would limit private equity firms’ ability to use the early childhood care industry as a quick investment opportunity and require oversight by the Securities and Exchange Commission (SEC). According to Riley’s Office, private equity backs 13 of the 16 largest for-profit childcare chains in the United States, and growth often comes from acquiring independent childcare providers, not by expanding slots or opening new locations.
A study from the National Women’s Law Center shows that childcare centers acquired by private equity maintain profitability by raising tuition and fee rates. A congressional analysis found that investor-owned childcare centers experience a decline in the quality of care due to employee turnover and low wages.
“Wall Street investors don’t care about the bills hitting our kitchen tables or the number of preschool slots open to Upstate New York families – all they care about is profit for their shareholders,” said Riley. “We can’t let them swoop into our communities, buy up daycares, and squeeze families for every dollar they can get. This is about creating guardrails to stop predatory investors from pricing out families, and making sure every parent has access to local, high-quality childcare they can actually afford.”
Under the bill, a private equity firm acquiring a childcare provider must hold onto it for a minimum of four years. That firm would also be barred from pulling money from the business through dividends, other payouts, or stock buybacks during that time period.
Additionally, the SEC would be required to track who owns childcare providers. When they are bought and sold, it directs a government study on how private equity ownership affects tuition, wages, quality of care, and childcare slot availability.
Read more from Congressman Riley’s Office here, including a full text of the bill.
