Rep. Wagner Wants Bill to Halt DOL Fiduciary Rule Marked Up by Month-End

‘DOL is dug in on this, but I’m pretty dug in, too,’ Wagner says ahead of Thursday hearing

Rep. Ann Wagner said Wednesday that her goal is to have her bill, H.R. 2374, the Retail Investor Protection Act, marked up and passed by the House Financial Services Committee by the end of September.

Discussion of the bill during a Thursday hearing held by the House Financial Services Capital Markets and Oversight and Investigations subcommittees, will mark an “important first step on the Retail Investor Protection Act to fix what I believe is a very bad fiduciary rule from the Department of Labor,” Wagner, R-Mo., said on a Wednesday call with reporters.

The joint hearing, titled “Preserving Retirement Security and Investment Choices for All Americans,” will also discuss “how to handle this overreach” by the Obama administration and DOL, Wagner said.

H.R. 2374 is “good legislation that prevents an overzealous administration from taking away sound advice from low- and middle-income savers,” Wagner added.

Wagner said on the call that while her bill could go straight to the full committee for a vote, the plan is to mark up her bill by “the end of the month.”

The Retail Investor Protection Act “could go to full committee in its original form, and has passed once before, but our plan is to move it to markup.”

Wagner, who is a member of both subcommittees, reintroduced her Retail Investor Protection Act on Feb. 25; it requires the DOL to wait to repropose its fiduciary rule until the Securities and Exchange Commission issues its own fiduciary rulemaking.

Wagner acknowledged that the “lobby” against her bill is “very tough,” citing opponents like Sen. Elizabeth Warren, D-Mass., as well as Labor Secretary Thomas Perez and the administration.

“DOL is dug in on this, but I’m pretty dug in, too,” Wagner said on the call with reporters. Her goal, she said, is to get the bill “dispatched through the House, and if the president vetoes it we’ll look at other options at that time.”

Wagner noted that she’d like her bill to move “as stand-alone legislation” and not attached to a year-end spending bill. If the bill doesn’t move forward in the Senate or President Barack Obama vetoes it, she added, “we’ll take that hurdle when it comes; I do believe there are ways, through the appropriations process, that this could be ultimately dealt with if necessary.”

Both the House and Senate appropriations committees have offered funding bills that state that “none” of the DOL’s funds may be used to “finalize, implement, administer or enforce” its proposed rule to redefine fiduciary under the Employee Retirement Income Security Act.

Wagner added that “there are major policy and process issues related to this rulemaking, which makes both subcommittees’ presence at this [Thursday] hearing necessary.” In addition, “there has been significant comment and feedback on the rule that will require careful consideration in analyzing the rule’s impact.”

Wagner cited Perez’s statement in an Aug. 7 letter to her that DOL will issue a final rule — not a reproposal — before holding the four-day stint of August hearings on the plan. “Based on that, it’s hard to imagine the DOL producing a workable rule based off of this proposal. The divide is just too wide between the two.”

As a result, Wagner continued, the Thursday hearing will “unravel the real-world impact of this rule based on how it is currently proposed.”

DOL held four days of public hearings on its plan from Aug. 10-14, and is now taking public comments on the hearing transcripts until Sept. 24.

The Thursday hearing will look at DOL’s economic analysis of the rule and “whether it’s credible, which I think it is not,” Wagner said. The hearing will also delve into whether DOL’s rule is “workable,” as well as the enforcement mechanisms that are in place at the SEC and the Financial Industry Regulatory Authority that opponents say make DOL’s rule unnecessary.

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