A resolution of disapproval aimed to block the Department of Labor’s fiduciary rule passed the House Committee on Education and the Workforce Thursday.
The rule, which places new regulations and mandates on retirement advisers, has been dubbed as “Obamacare for your retirement plan” by GOP lawmakers. Critics fear the red tape placed on financial planners will alienate low-and-middle income Americans from receiving retirement advice by raising costs.
The resolution, led by Chairman of the Health, Employment, Labor, and Pensions Subcommittee Rep. [crscore]Phil Roe[/crscore] of Tennessee, would prevent the regulation, which was released by the administration in its final form in early-April, from being implemented.
The 1,000-plus page rule was intended to raise standards on those providing retirement advice by broadening the scope of who is considered a fiduciary. Republican lawmakers say this puts advisers at higher risks for lawsuits and creates an influx of off-putting paperwork for both planners and investors alike. While the DOL softened some of the language from its initial proposal after strong bipartisan criticism, lawmakers say the agency ignored major concerns expressed during the rule’s comment period.
“Through letters, hearings, and other oversight efforts, we encouraged the department to withdraw its misguided proposal and go back to the drawing board,” Roe said in his opening statement. “Eventually, they did—only to release a similarly flawed proposal last year. Since then, we have continued our efforts to draw attention to the consequences of the latest fiduciary proposal and encourage the department to pursue a balanced approach. We even advanced a responsible legislative alternative, which I was proud to introduce.”
Several Democrats on the panel argued the rule is necessary to protect investors from bad actors recommending products that are most profitable to them instead of what is best for their client.
The resolution is expected to be voted on in the lower chamber next week.
House Speaker [crscore]Paul Ryan[/crscore] praised the committee for moving forward with the legislation.
“There is not a day where I am home—every week—where someone does not come up and talk to me about this particular issue. We all want to make sure that people get sound advice to save for the future. This is not that. This fiduciary rule is not that,” he said at his weekly press conference Thursday. “This is Washington coming in and imposing all kinds of artificial rules and limits. It is total Washington overkill. Through the Congressional Review Act, we can directly reject costly regulations, and that is how we are going to try and stop this fiduciary rule.”
A resolution was also introduced by a group of Republican senators in the upper chamber Monday.
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