Fiduciary ‘Grievances’ Aired at House Hearing
We’re months away from December, but it felt like a fiduciary rule Festivus on Capitol Hill Sept. 10
as members of Congress aired their grievances about the Department of Labor’s (DOL) proposed extension authority to regulate assets contained in retirement accounts.
Two subcommittees of the House Financial Services Committee held a joint hearing
on the fiduciary rule, with a bipartisan coalition of members expressing general skepticism about the necessity of the rule and raising concerns about its impact on savers with moderate balances in retirement accounts.
Rep. Ann Wagner (R-Mo.) spearheaded the hearing, highlighting her legislative proposal, the Retail Investor Protection Act
(H.R. 1090). Wagner’s bill would prevent the DOL from finalizing its fiduciary regulation until the Securities and Exchange Commission (SEC) issues a rule relating to the standards of conduct for brokers and dealers under Section 913 of the Dodd-Frank law.
In the last Congress, the Wagner bill garnered the support of 30 House Democrats
, most of whom served on the Financial Services Committee, which has jurisdiction over the SEC. After the hearing concluded, Jeb Hensarling (R-Texas), the Chairman of the full House Financial Services Committee, issued a press release
pledging to advance the Wagner bill out of the Committee again in this Congress. It is unclear whether the bill will be considered by the full House of Representatives later in the fall, but it is sure to stall and die in the Senate, as it did in the last Congress, due to Democratic opposition to her approach.
The hearing also featured testimony from four financial services industry representatives opposed to the proposed rule and one investor advocate supporting it. Notably, there were no Obama administration witnesses from either the DOL or the SEC to present the administration’s viewpoint on the issue, which is somewhat unusual for a congressional hearing. In fact, some Democrats on the committee lamented that they could not question a representative from the government department that is in charge of writing the rule.
The faces of the panelists might have been familiar to close fiduciary rule observers since all of the hearing witnesses who testified at the hearing participated in DOL’s public hearing on the fiduciary rule in August. Predictably, their messages to Congress were consistent with their messages to the DOL last month. See the links for their written statements:
- Caleb Callahan, ValMark Securities, on behalf of the Association for Advanced Life Underwriting (testimony)
- Paul Schott Stevens, Investment Company Institute (testimony)
- Prof. Mercer Bullard, University of Mississippi School of Law (testimony)
- Juli McNeely, National Association of Insurance and Financial Advisors (testimony)
Andrew Remo is the Director of Congressional Affairs at the American Retirement Association.
- Scott Stolz, Raymond James & Associates, Inc. (testimony)