House Committee to Hold Hearing on Fiduciary Proposal Bill

By Andrew Remo • September 04, 2015 • 0 Comments
Congress returns from its summer break next week, and House Republicans are wasting no time reengaging in oversight of the Department of Labor’s (DOL) fiduciary rule re-proposal.

On Sept. 10, two subcommittees of the House Financial Services Committee are planning to hold a joint hearing on the fiduciary rule. Their focus: legislation that would effectively kill the regulatory effort, at least for the rest of the Obama administration. That bill, the Retail Investor Protection Act (H.R. 1090), would prohibit the DOL from issuing its fiduciary rule until the Securities and Exchange Commission issues a final rule governing standards of conduct for brokers and dealers under Section 913 of the Dodd-Frank law. The lead sponsor of the bill, Rep. Ann Wagner (R-Mo.), is a member of the Financial Services Committee.

The hearing is expected to lay the groundwork for the Wagner bill to move forward through the House Financial Services Committee later in the fall. However, it faces intractable Democratic opposition that will prevent it from becoming law.

News of the hearing came the same week as a key Democratic member of the House Financial Services Committee, Rep. Carolyn Maloney (D-N.Y.), weighed in to the DOL about its fiduciary rule project. In a Sept. 2 letter to DOL Secretary Thomas Perez, Maloney praised the DOL for moving forward with the fiduciary rulemaking and argued that the limited scope of the seller’s carve-out in the proposed rule should not be expanded in the final rule.

The letter also laid out a legal argument for why the new standard of care language contained in the Best Interest Contract Exemption (BICE) will not be in conflict with any future SEC rulemaking under Section 913 of Dodd-Frank. Maloney’s argument is sure to provide ammunition to supporters of DOL’s fiduciary rule as a key reason why the Wagner bill is not necessary.

Andrew Remo is the American Retirement Association’s Director of Legislative Affairs.