A House panel will move legislation to stop the Obama Labor Department from finalizing a rule cracking down on conflicts of interest in retirement advising, the committee’s Republican chairman said Thursday.
Rep. Jeb Hensarling of Texas, the chairman of the House Financial Services Comitteee, said Thursday that the committe “will stand with lower- and middle-income savers and prevent government bureaucrats from denying them access to reliable and affordable retirement saving options.”
Hensarling said the committee would advance a bill introduced by Rep. Ann Wagner, R-Mo., that would effectively prevent the Labor Department from acting on a rule in favor of having the Securities and Exchange Commission decide how to regulate retirement advisers.
The move is intended to stop the the controversial rule, which the Obama administration has supported as a pro-worker measure.
The rule would expand the definition of retirement financial advisers who are required under law to act in their clients’ best interest.
Currently, that legal standard, known as the fiduciary standard, is not required of many brokers, insurers and other financial professionals who help workers with savings that are treated preferentially under labor law.
Advisers who are not held to the fiduciary standard in some cases direct clients into higher-fee financial products for which they receive compensation. The White House and Labor Department have argued that these “kickbacks” run into the tens of billions of dollars each year and can seriously lower returns for savers and threaten their retirement.
The industry has lobbied to stop the rule, countering that it would amount to preventing some kinds of brokers and other agents from offering advice that clients are willing to pay for.
“Unfortunately, the Department of Labor’s proposed regulation will make that advice either unavailable or unaffordable for millions of hard-working American families, particularly those with lower and moderate incomes who are struggling in this economy to save for retirement,” Hensarling said.
He compared the rule to Obamacare, claiming that it would “put Washington in control of your retirement planning.”
The Labor Department is expected to finish the rule this year.
