The California Democrat is accused of helping OneUnited Bank, where her husband -- a former board member -- owned a large amount of stock, get funds through the Troubled Asset Relief Program, The Hill reported.
Waters is charged with breaking a rule requiring House members to act in a manner that reflects "creditably" on the House.
The ethics committee said it found "substantial reason" to believe she took steps to maintain the value of her husband's stock holdings, thus benefiting herself. By allegedly using her seat for financial gain and handing out special favors, she also violated the "spirit" of rules banning such actions, congressional investigators concluded.
The accusations -- details of which will come in formal charges when Congress returns from recess -- came after the committee released a report on Waters' ties to OneUnited.
Waters has strongly denied violating rules and said she'd prefer to offer a defense at a trial to admitting to something she didn't do.
In September, Waters's chief of staff and grandson, Mikael Moore, sent OneUnited executives draft legislation designed to allow the Treasury Department to buy bank assets, and the bank's senior counsel, Robert Cooper, sent an e-mail message to the chief of staff thanking him for his work, the ethics committee said.
The legislation authorizing TARP was crafted to apply to OneUnited, Financial Services Committee Chairman Rep. Barney Frank, D-Mass., said. The bank received $12 million in TARP funds in December.
The report released by the ethics committee says Waters failed to stop Moore from helping OneUnited after she had told Frank she would halt contact with the bank.
Waters's husband, Sidney William, had bank stock holdings valued at more than $350,000 at the end of 2007, records indicate.