Congress Pushes Back On Rule Putting Robots In Charge Of American Retirements

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Juliegrace Brufke Capitol Hill Reporter
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The Department of Labor’s (DOL) fiduciary rule, which expands the scope of regulations placed on financial advisers, is in its final stages after being sent to the White House Office of Management and Budget (OMB) Thursday for review.

The initial proposal supports using automated robo-advisers for retirement planning, the option supported by the Obama administration, over in-person financial advice provided by an adviser working on commission.

The rule is an attempt by the federal agency to prevent conflicts of interest by eliminating the incentive for advisers to suggest options with higher commission percentages for personal gain. Critics of the rule fear changing the way financial planners are compensated will result in low-and middle-income Americans, who may not be able to afford steep hourly fees, being alienated from receiving retirement advice.

If the DOL rule is enacted, it would redefine what the Employee Retirement Income Security Act considers a fiduciary, which could lead to an increase in lawsuits on those providing guidance in the financial sector.

A source close to the House Ways and Means Subcommittee told The Daily Caller News Foundation it would hold a mark-up Wednesday on the issue.

The lower chamber is expected to move quickly on bipartisan legislation introduced by Ways and Means Subcommittee on Oversight Chairman [crscore]Peter Roskam[/crscore], Massachusetts Democrat [crscore]Richard Neal[/crscore], Tennessee Republican [crscore]Phil Roe[/crscore] and Connecticut Democrat [crscore]John Larson[/crscore] that would offer an alternative to the agency’s proposal.

The SAVERS Act would protect consumers’ best interests without placing any unnecessary financial burden that would prevent many from shopping around for the investment that best fits their personal needs.

More than half of House Democrats signed a letter addressed to Secretary of Labor Thomas Perez in September coming out against the regulation in its current state.

The amount of disdain for the regulation on both sides of the aisle could be enough to override a presidential veto.

The final rule is expected to be released by the DOL in the spring following approval from the OMB.

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