Rep. Ann Wagner’s bill to repeal the Labor Department’s fiduciary rule, the Protecting Advice for Small Savers Act of 2017, H.R. 3857, passed out of the House Financial Services Committee on Thursday.
The bill, which passed by a vote of 34-26, now goes to the House.
Wagner’s PASS Act establishes a best-interest standard for broker-dealers, and as she said recently, repeals Labor’s rule, “period. Full stop. And it gets the Department of Labor out of the broker-dealer space.”
SEC Chairman Jay Clayton told House lawmakers on Oct. 4 that the agency is working on its own fiduciary rule and that “a lot of the themes that you outlined [in the PASS Act] are the themes that I have.”
Opponents of Labor's fiduciary rule were quick to respond to the advance of Wagner's bill.
Dale Brown, president and CEO of the Financial Services Institute, said that Wagner's PASS Act "paves the way for a best interest standard for financial advice created by the SEC, something we have long supported, while ensuring investors continue to have access to affordable, objective financial advice as well as a wide array of products and services to assist them in saving for a secure retirement."
Dirk Kempthorne, president and CEO of the American Council of Life Insurers, applauded committee passage of the bill, stating that it "represents an important step toward efficient and effective uniform standard of conduct regulation that would ensure Americans receive financial advice that is in their best interest while also maintaining access to the financial products and services they want and need."
Kempthorne encouraged the full House to pass the legislation, which he said "also encourages state insurance regulators to adopt a similar standard for the sale of annuities."
ACLI looks forward "to working with the Congress, the Securities and Exchange Commission, the Financial Industry Regulatory Authority, state insurance regulators, Labor and all interested parties on public policies that help Americans achieve their financial and retirement security goals," he added.
The Senior Safe Act "is a critical step in preventing elder financial abuse nationwide," said FSI's Brown. "It allows financial professionals to report abuse to government organizations, without violating privacy laws, as well as standardizes training to help identify and report instances of suspected abuse."
The Market Data Protection Act "will help protect investors’ personal information from falling victim to the next cybersecurity breach," added Brown. FSI "strongly encourages the full House of Representatives to bring these bills to a vote and pass them quickly. Now more than ever, cybersecurity and the protection of personal information is of utmost importance."
A total of 22 bills passed out of the committee on Wednesday and Thursday.
H.R. 1585, the Fair Investment Opportunities for Professional Experts Act, amends the Securities Act of 1933 to modify the definition of accredited investor to include:
(1) persons whose individual net worth, including their spouse’s, exceeds $1 million, excluding the value of their primary residence;
(2) persons with an individual income greater than $200,000, or joint income with one’s spouse greater than $300,000;
(3) persons with a current securities-related license; and
(4) persons whom the U.S. Securities and Exchange Commission (SEC) determines have demonstrable education or job experience to qualify as having professional subject-matter knowledge related to a particular investment.
The Family Office Technical Correction Act of 2017, H.R. 3972, which passed by a 60-0 vote, clarifies that family offices and family clients are accredited investors under Regulation D of the Securities and Exchange Commission if they have more than $5 million in wealth.
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