Firing back two days after President Barack Obama backed the Department of Labor's efforts to revise fiduciary rules for retirement plan advice, Rep. Ann Wagner, R-Mo., reintroduced her bill Wednesday to require the DOL to wait to repropose its rule until the Securities and Exchange Commission issues its own fiduciary rulemaking.
Wagner's bill, H.R. 2374, the Retail Investor Protection Act, passed the House last year. But the Senate had "no interest" in taking up the bill and President Barack Obama's senior advisors threatened that it would be vetoed.
Better Markets and the Consumer Federation of America sent a letter to the full Senate the same day, arguing that the DOL rulemaking should be allowed to move forward as the "actual contents" of the DOL rule have not been made public. The discussion about the DOL rulemaking "has for the most part been based on speculation," Barbara Roper, director of investor protection for the Consumer Federation, and Dennis Kelleher, president and CEO of Better Markets, said in a letter.
"Much of [the discussion/complaints about the DOL redraft] has been directly contradicted by statements from DOL officials about its expected regulatory approach," Roper and Kelleher wrote.
In a statement Wednesday, Wagner said that she is reintroducing her bill because Obama and Sen. Elizabeth Warren, D-Mass., "presented a solution in search of a problem by proposing another massive rulemaking from Washington that will harm thousands of low- and middle-income Americans' ability to save and invest for their future."
"This top-down, Washington-centered rulemaking against financial advisors and broker-dealers will harm the very middle-income families that Senator Warren and President Obama claim to protect," Wagner said. "Americans should be given more freedom to seek sound financial advice without Senator Warren and President Obama's interference."
Wagner's bill says that the SEC would be required to "go first" in issuing its rulemaking under Section 913 of the Dodd Frank Act before the DOL is able to propose a rule that expands the definition of a fiduciary under the Employee Retirement Income Security Act.
But Roper and Kelleher told the Senate that the DOL rule should be "allowed to go forward, so that the public and all stakeholders have an equal opportunity to see the actual content of the rule." Indeed, they wrote, "as required by law, at the close of the public comment period, DOL will consider all of the comments and input and decide the best course of action consistent with the law."
By sending the rule to the Office of Management and Budget, DOL is simply starting the process to release the actual proposed rule for public comment, the two wrote.
