Two top GOP lawmakers told Labor Secretary Thomas Perez on Wednesday to furnish to them by March 18 all of the correspondence between the Department of Labor and the Securities and Exchange Commission regarding DOL's fiduciary redraft.
Rep. John Kline, R-Minn., chairman of the House Education and the Workforce Committee, and Rep. Phil Roe, R-Tenn., chairman of the Health, Employment, Labor and Pensions Subcommittee, told Perez that a "revised notice of proposed rulemaking" should not be issued by the DOL "until after Congress is satisfied that sufficient coordination has occurred."
The two lawmakers state that they specifically want to see correspondence regarding the department's consultation with SEC "as it worked to introduce a new proposal to redefine the fiduciary standard" under the Employee Retirement Income Security Act.
Said Kline: "The public has been assured repeatedly that close consultation between these two agencies was underway to avoid any regulatory confusion and inconsistencies."
However, he added, "recent statements by a member of the SEC raise serious doubts about whether meaningful consultation has taken place. This rulemaking will affect the retirement security of millions of Americans, and I hope the department has done more than simply pay lip service to good government on this very important issue."
Kline noted recent concerns raised by SEC Commissioner Daniel Gallagher that he has "not seen" the DOL's reproposal, which Gallagher said is "curious" given the SEC's "comprehensive oversight authority with respect to the investment advisors and broker-dealers who would be impacted" by the DOL fiduciary redraft.
Kline and Roe stated that Gallagher's remarks are "inconsistent with public pronouncements from the administration," citing, for example, testimony Phyllis Borzi, assistant secretary for Labor's Employee Benefits Security Administration, gave before the HELP Subcommittee that DOL, SEC and others "are actively consulting with each other and coordinating our efforts."
This "pledge," the lawmakers state, "was echoed in the press release withdrawing the initial rule. More recently, Assistant Secretary Borzi has publicly repeated this promise."
