As anticipated, GOP lawmakers are introducing bills to block the Department of Labor’s recently released rule to amend the definition of fiduciary on retirement advice.
Keeping to her promise to use the Congressional Review Act to stop DOL’s final rule to amend the definition of fiduciary under the Employee Retirement Income Security Act, Rep. Ann Wagner of Missouri, along with two other GOP lawmakers, introduced Tuesday a joint resolution disapproving the rule.
The resolution, which will be marked up by the House Education and Workforce Committee on Thursday, is co-signed by Rep. Phil Roe, R-Tenn., chairman of the Subcommittee on Health, Employment, Labor and Pensions, along with Rep. Charles Boustany, R-Louisiana, chairman of the Subcommittee on Tax Policy.
On Monday, Republican Sens. Johnny Isakson of Georgia, Lamar Alexander of Tennessee and Mike Enzi of Wyoming introduced a similar resolution.
DOL announced its final rule on April 6; Congress may pass a resolution of disapproval of a rule within 60 days under the Congressional Review Act, which would block the DOL from implementing the rule or issuing a similar one without congressional authorization.
But President Barack Obama would likely veto such a resolution.
The final rule and exemptions adopt a “phased” implementation approach. According to a DOL fact sheet, in April 2017, the “broader definition of fiduciary will take effect, but to take advantage of the [best interest contract] exemption, firms will only be required to comply with more limited conditions, including acknowledging their fiduciary status, adhering to the best interest standard, and making basic disclosures of conflicts of interest.”
The other requirements of the exemption will go into full effect on Jan. 1, 2018.
In introducing the resolution, Wagner said DOL’s fiduciary rule “hurts those it claims to protect: low- and middle-income families who are looking for sound investment advice in the midst of a savings crisis. The unquestionably flawed rule raises costs, limits choices and restricts access to investments for hardworking Americans.”
Roe added that DOL’s “new regulatory scheme will hinder access to retirement advice for low- and middle-income families and make it harder for small businesses to help their employees plan for retirement. Hardworking men and women should be able to look forward to retirement, and our resolution will help ensure they’re able to prepare for the years ahead.”
— Check out FINRA’s Ketchum Praises Final DOL Fiduciary Rule—Sort Of on ThinkAdvisor.