The U.S. House of Representatives passed legislation aimed at delaying the Department of Labor’s fiduciary rulemaking on Tuesday night.
In a 245 to 186 floor vote, the House passed H.R. 1090, which was introduced by Representative Ann Wagner (R-Mo.) in February. The bill, titled Retail Investor Protection Act of 2015, would require the DOL to wait 60 days after the Securities and Exchange Commission publishes a rule regarding brokers’ fiduciary duty before releasing its own rule.
The proposed legislation also requires the SEC to conduct an analysis to determine if investors would be “systematically harmed or disadvantaged” by the rulemaking. Barbara Roper, director of investor protection at the Consumer Federation of America, believes the measure is a delay tactic. "The SEC has been studying this issue for close to a decade. We don't need another study, we need a rule," she said.
In supporting the H.R. 1090 on Tuesday, Rep. Doug Collins (R-Ga.), argued the Labor Department’s fiduciary rule would deprive middle class of meaningful, personalized advice and cited a recent conversation with Edward Jones advisor Beth Baldwin.
“She was scared about the impact the fiduciary rule would have on her ability to do her job. She told me the fiduciary rule would prevent her from helping people,” Collins said.
Several Democrats, including Rep. Jared Polis (D-Colo.), argued against passing H.R. 1090 until after a finalized Labor Department rule is released. “Even if my friends on the other side of the aisle think they might not like this final rule, let’s at least give the Department of Labor, after several years of hard work, the chance to produce it. If at that point, the majority feel there are parts of the rule they don’t want or don’t like…that would be the appropriate time for this bill to intervene,” he said.
Despite the bill’s passage in the House Tuesday night, opponents of the Labor Department’s rulemaking have a long way to go to actually halt the agency's regulatory efforts.
On Monday night, the Obama administration released a statement strongly opposing H.R. 1090, saying the president would veto the legislation if it passed both chambers of Congress. Meanwhile, the Senate has shown no interest in taking up its own version of Wagner’s bill.