Senate Joins House in Fiduciary Regulation Disapproval
Republicans in Congress continued their campaign to kill the Department of Labor’s (DOL) fiduciary rule — and managed to pull three Senate Democrats over to their side.
The Senate voted 56-41 on May 24 to formally disapprove of the rule under the Congressional Review Act (CRA), with three Democrats — Heidi Heitkamp (N.D,), Jon Tester (Mont.) and Joe Donnelly (Ind.) —crossing the aisle to help pass the disapproval resolution (H.J. Res. 88) by a 56-41 margin. Sens. Ted Cruz (R-Texas), Bernie Sanders (I-Vt.) and Tom Carper (D-Del.) did not vote.
The vote in the Senate come on the heels of a successful, albeit party-line, vote in the House of Representatives last month.
The CRA, enacted into law as part of a larger legislative package in 1996, gave Congress the power to nullify final new regulations of major economic significance under a fast-track legislative process within 60 days after final rules have been issued but before they become effective. The DOL’s fiduciary rule, finalized and published on April 8, 2016, qualifies as a major regulation subject to the CRA.
The Senate vote is the latest chapter in the likely futile effort to undo the DOL’s efforts over a span of five years to update and expand the definition of what constitutes investment advice to retirement accounts that would be subject to a fiduciary standard of care.
Next, the resolution heads to President Obama’s desk, where it awaits a certain veto. Neither the House nor the Senate has the votes to override a veto and, although the potential for litigation challenging the regulation remains, the fiduciary rule will become effective in mid-June and applicable in beginning in April 2017.
Andrew Remo is the American Retirement Association’s Director of Congressional Affairs.