Despite the fact that the House is poised to pass a bill Tuesday to hinder the Department of Labor’s rerelease of its fiduciary rule, the primary architect of the rule, Phyllis Borzi, said the same day that “it is entirely possible” that the reproposal could be at the Office of Management and Budget by year-end.
“We are coming very close to finishing our work” on the re-proposed rule, Borzi, assistant secretary of Labor for the Employee Benefits Security Administration, told attendees at the American Society of Pension Professionals and Actuaries’ annual conference in National Harbor, Md., just outside Washington.
The “conflicts of interest rule,” she continued, is DOL’s “highest priority.”
Indeed, OMB released a statement Monday that President Barack Obama’s senior advisors would recommend that he veto H.R. 2374, the Retail Investor Protection Act, introduced by Rep. Ann Wagner, R-Mo, which would require the DOL to wait to repropose its fiduciary rule until 60 days after the Securities and Exchange Commission issues its fiduciary proposal under Section 913 of the Dodd-Frank Act.
While the Republican-controlled House “will likely pass” Wagner’s bill, Borzi told ThinkAdvisor after her remarks, “we’re a long way from having a law.”
Said Borzi: “My job is to get my work done.”
OMB said that the administration “strongly opposes passage of H.R. 2374 because it would derail important rulemakings” underway at the SEC and DOL “that are critical to protecting Americans’ hard-earned savings and preserving their retirement security.”
H.R. 2374 “prohibits Labor from issuing a rule to protect investors until the SEC engages in and completes further study of the effect of a rulemaking on retail investors,” OMB said. “The bill ignores the fact that significant work has already been conducted in both agencies and that the agencies have included and continue to include the public, industry and numerous stakeholders in their rulemaking processes.”
The two agencies, OMB continued, “are already working closely to avoid conflicting requirements for the regulated community, and this legislation would hamper effective coordination between the two agencies. The bill would hinder efforts to protect consumers from conflicts of interest among brokers, dealers, financial advisors, and others whose incentives may be misaligned with investors, potentially leading to deceptive and abusive practices.”