The House Financial Services Committee passed late Wednesday afternoon by a 34-25 vote Rep. Ann Wagner's bill to stop the Department of Labor from finalizing its fiduciary rulemaking until the Securities and Exchange Commission acts first.
Wagner's bill, HR 1090, the Retail Investor Protection Act, was referred to the full House. The House Ways and Means Oversight Subcommittee held a hearing on DOL's fiduciary redraft the same day.
While SEC Chairwoman Mary Jo White said Tuesday during an SEC event in Washington that a uniform fiduciary rulemaking would be on the agency's rulemaking agenda going forward, a fiduciary rule won't be coming anytime soon.
Wagner said during the Wednesday markup that DOL "has demonstrated at every possible instance that they don't have the capability or desire to listen or make necessary changes to the final rule and are on a deadline to get the rule out the door before the end of this administration," which she said means that a final rule would likely "bring unintended or possibly intended consequences" to millions of investors saving for retirement.
Wagner argued that DOL's plan would make "sweeping changes to the way that Americans receive financial advice" for their retirement savings, and that it would "force millions of low- to moderate-income retirement savers from the advice market to robo-advisors."
But Tim Houser, deputy assistant secretary for program operations of DOL's Employee Benefits Security Administration, told attendees at an event held by the Investment Management Consultants Association at the National Press Club in Washington on Tuesday to "bear in mind that this is just a proposal; we just finished a notice and comment period, and I have little doubt that the rule is going to change as we move to a final."
Rep. Gwen Moore, D-Wis., who voted for Wagner's original bill floated in 2013, said she couldn't support Wagner's bill this time around, noting that the "landscape has changed" since then. "We have to at least see what the [DOL] proposal is before we do anything that's more draconian," she said.
Wagner said the latest version of her bill "makes it easier" for the SEC to move ahead with a fiduciary rulemaking.
Damon Silvers, associate general counsel for the AFL-CIO, who testified at the House Ways and Means Oversight hearing, said that his "fellow witnesses," testifying on the panel that DOL's rule would block advice "will be giving advice to all of their clients once the [DOL] rule is passed."
Barbara Roper, director of Investor Protection for the Consumer Federation of America, said after Wagner's bill passed that "today's vote forces us to choose between seeing the glass as half-full or half-empty. Certainly it is disappointing that a majority of Committee members voted in favor of a bill that would call a halt to regulatory efforts to ensure that all retirement savers get advice that serves their best interests. And the pretense that this is being done to protect retail investors is particularly galling," Roper said.
