House Committee Passes Bill to Delay DOL Fiduciary Rule
October 1, 2015 by Frank Klimko, Washington correspondent, BestWeek: frank.klimko@ambest.com
WASHINGTON – The House Financial Services Committee approved a bill to delay implementation of a proposed U.S. Department of Labor regulation industry representatives say would impose unworkable standards on investment advisers and change the way investors receive advice.
With a vote of 34-25, the panel on Sept. 30 approved the Retail Investor Protection Act, H.R. 1090, sponsored by U.S. Rep. Ann Wagner, R-Mo. The bill would require the DOL to hold off on imposing the fiduciary rule until the U.S. Securities and Exchange Commission signs off on its version. The SEC has published no timeline on finalizing its fiduciary rule proposal.
The DOL has proposed the conflict of interest rule as a way to protect investors from advisers who recommend high-cost products that result in little benefit to their customers. Industry representatives testified earlier this week that the rule is largely unworkable and would disrupt the entire investment industry (Best’s News Service, Sept. 30, 2015).
The rule has been the subject of a number of congressional hearings and a lengthy public input period, generating thousands of comments. Industry representatives anticipate a final rule to be published within several months, with an implementation window that could stretch to one year.
The Independent Insurance Agents & Brokers of America reacted positively to the committee vote.
“Rep. Wagner’s bill includes a number of important provisions and due process requirements to ensure that consumers are not harmed by the proposed fiduciary rule,” said Charles Symington, IIABA senior vice president of external and federal government affairs.
“The Big ‘I’ is greatly concerned that agents, brokers and the consumers they serve would be adversely affected by the establishment of a universal fiduciary standard of care promulgated by the DOL,” Symington said in a statement. “As currently structured, the rule promises to create undue compliance burdens and increased liability for the association’s small business membership, thereby increasing costs for consumers and restricting access to quality investment advice for those most in need.”
The bill will now be scheduled for a vote on the House floor, where it is expected to pass. Its fate in the Senate is uncertain.