The Department of Labor’s rule to amend the definition of fiduciary for retirement advice survived one hurdle late Tuesday as the omnibus spending bill did not include riders requiring the rule to undergo another comment period or to defund the rule.
While Congress reached a deal late Tuesday evening on the $1.1 trillion omnibus bill, supporters of DOL’s bill to amend the definition of fiduciary under the Employee Retirement Income Security Act are bracing for other assaults on the rule.
A vote on the package is expected Thursday, though Republicans and Democrats will hold conferences on the bill Wednesday before final passage.
The rider was opponents’ “best opportunity to kill the rule before it was completed,” said Barbara Roper, director of investor protection for the Consumer Federation of America.
Once the fiduciary rule is finalized, Congress could pass a resolution to disapprove the rule within 60 days under the Congressional Review Act. But President Barack Obama would likely veto such a resolution.
Lawsuits as well as legislation to replace DOL’s rule remain at play. Opponents “will doubtless continue [their] multi-front war” on the DOL rule, Roper said, with the “next big challenge to the rule is from the inevitable industry lawsuit” as well as “additional headaches” from Congress.
The Financial Planning Coalition applauded Congress for “standing up for American investors by resisting attempts to halt or delay” DOL’s rule. “Retirement investors need – more than ever – unconflicted advice that is in their best interests. By allowing the DOL to proceed with its rulemaking without further delay, members are taking an important step to strengthen retirement security for Americans.”
Dale Brown, president and CEO of the Financial Services Institute, noted that while “the odds of passing an omnibus bill with a rider … were always slim,” that rider “is not Congress’ only chance to act.” FSI is “pleased” by the efforts of Reps. Peter Roskam, R-Ill., and Richard Neal, D-Mass., ”to drive a bipartisan solution to this critical issue” with their retirement principles bill.
“Congress not only has the right but the duty to fulfill their legislative role and protect retirement savers. We note that Sens. Portman and Cardin have stated their strong belief that congressional involvement is essential. This is why all advisors must get engaged in the legislative process and advocate for hardworking Americans trying to save for a dignified retirement,” Brown said.
Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association, added that SIFMA continues “to believe the DOL rule as proposed will have negative consequences for retirement savers: restricting access to financial advice and raising the cost of saving.”
Because there are “so many issues with the proposal, as evidenced by the thousands of substantive comments filed,” he said, “the Department should repropose the rule.”
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