In a letter addressed to Rep. Ann Wagner, R-Missouri, Labor Secretary Thomas Perez vowed to move forward with finalizing the Department’s proposed conflict of interest rule, which would impose fiduciary standards on nearly all advisors to IRAs and 401(k) plans.
In a letter sent to Perez last week, Wagner and 19 other House members, including two Democrats, expressed concern that a final rule will be markedly different from the proposal now being vetted in an open public meeting hosted by the DOL.
Amendments to the proposal would require further review by stakeholders. For that reason the DOL should be required to re-propose the rule, reinitiating the rule-making process.
“We feel it is in the interest of our constituents that the DOL re-propose this fiduciary regulation to ensure adequate stakeholder involvement in the notice and comment period during a new formal rulemaking process,” wrote Wagner.
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Her letter came as moderate Democrats in the Senate also wrote Perez expressing their concerns over the proposal.
In his response to Wagner, Perez detailed years of coordination with industry stakeholders that went into the proposal.
“The new proposal was designed to allow for the flexibility the financial services industry requested,” wrote Perez.
Finalizing a rule that puts clients’ interests first is a “simple premise presented with an open mind,” he added.
And the high level of interest and contribution to the rule-making process from stakeholders proves recognition of the growing problem of conflicted advice, and a “get to yes” attitude that will lead to a “meaningful and workable” rule, said Perez.