Two high-ranking Republicans are urging the Office of Management and Budget to conduct a full review of the Department of Labor’s fiduciary proposal. The DOL should give the public at least 90 days to review the proposal when it’s released, the lawmakers said.
In a joint letter sent Tuesday to OMB Director Shaun Donovan, John Boozman (R-Ark.), the chairman of the Senate Appropriations’ subcommittee on financial services, and Ander Crenshaw (R-Fla.), chairman of the House Appropriations’ subcommittee on financial services, said the Securities and Exchange Commission should move first on any fiduciary rulemaking for financial advisors. But when the DOL does release its proposal for public comment following a review, the OMB should ensure everyone has adequate time to review and comment.
“When the DOL releases its proposal, it should ensure that the public has a meaningful opportunity to participate in the regulatory process,” the letter says. “Given the concerns raised with the initial rule proposal, the DOL should guarantee that the public will have at least 90 days to review, analyze and comment on any proposed rule, proposed exemptions, regulatory impact and cost-benefit analysis.”
The Republican congressmen added that they believed the rule would significantly harm low and middle income investors, adding that “the cumulative effects of the SEC and DOL rulemakings will lead to inconsistent and overlapping regulatory requirements that increase investor costs and reduce access to investment advice.”
"The Department of Labor, if they have truly listened to the industry and members of Congress from both sides of the aisle, should welcome a 90-day process and thorough review at OMB,” Robert Lewis, the Financial Services Institute's vice president of legislative affairs, said Wednesday.
“Research shows the average OMB review for rules promulgated by the Department of Labor is 117 days – for rules far less controversial,” he said. “Anything shorter than that could raise serious questions about the review process."
Following a speech by President Barack Obama in support of the fiduciary proposal, the DOL submitted its rulemaking to OMB, which reviews it before sending it back to the DOL before the public comment period. The proposed rule is expected to require advisors overseeing retirement plans to act under a fiduciary standard, putting client interests ahead of all other considerations when making investment recommendations on accounts covered under the Employee Retirement Income Security Act.