Labor Secretary Alexander Acosta signaled Wednesday that the Labor Department will issue new fiduciary-related rules.
In an exchange during an oversight hearing held by the House Education and Labor Committee, Rep. Marcia Fudge, D-Ohio, questioned Acosta on Labor’s fiduciary plans.
Acosta said that Labor is collaborating with the Securities and Exchange Commission as it works on its advice-standards package, which includes Regulation Best Interest, and that “based on our collaborative work, we will be issuing new rules in this area.”
Here is Acosta’s exchange with Rep. Marcia Fudge, D-Ohio:
“For far too long, certain, not all, retirement advisors have put their interest above their clients. Workers across this country are demanding a higher standard of care,” Fudge said. “They deserve peace of mind when planning for their retirement. The Department of Labor owes it to the workers of America to fully implement current rules and regulations put in place to ensure that they receive unbiased and fair advice. What is your plan to protect these workers?”
Acosta replied: “Congresswoman, first let me say, you are correct. Like all industries, the investment industry has some bad actors and individuals need to be protected. As you’re aware, the fiduciary rule was struck down by an appeals court. It was held to exceed the statutory authority — ”
Fudge interrupted: “I just want to know what you’re going to do, sir.”
Said Acosta: “I’m getting to that … so the department is working with the SEC. The SEC was asked by Congress to look at modernizing the protections in these — ”
Fudge interrupted again: “Sir, I’m asking what are you going to do? What is your Department of Labor going to do?”
Acosta replied: “The Department of Labor is working with the SEC; the SEC was asked by Congress to come up with appropriate responses to protect these individuals; we are communicating with them [the SEC] and based on our collaborative work, we will be issuing new rules in this area.”
Fudge then asked: “When will that be?”
Acosta Replied: “The SEC is in the process of producing those rules. We’re working with an independent agency.”