Sen. Elizabeth Warren urged Office of Management and Budget Director Shaun Donovan Wednesday to "quickly finalize" the Department of Labor's rule to change the definition of fiduciary on retirement advice because large insurance companies and financial services firms have been exaggerating the negative impacts of the rule.
In her letter to Donovan and Labor Secretary Thomas Perez, which was sent jointly with Rep. Elijah Cummings, D-Md., ranking member of the House Committee on Oversight and Government Reform, Warren states that while firms like Prudential Financial, Lincoln National, Jackson National and Transamerica have publicly chided DOL's rule to change the definition of fiduciary under the Employee Retirement Income Security Act, they are telling their investors the rule "will have no significant impact on their companies."
Warren cites the firms' "doomsday predictions" made in earnings call transcripts, comment letters to DOL and in published articles.
In earnings calls, Warren says officials have told investors such things as they don't see DOL's rule as "a significant hurdle," and that they are well-positioned to "adapt to any regulatory framework that emerges."
Said Warren: "Publicly traded companies are rarely held accountable for the assertions they make when lobbying in Washington, even if these assertions are untrue. But when communicating with investors, publicly traded companies are required by law to provide full and accurate information about any material matters that may affect their business models and valuations."
