The new Congress has only been in session for four days, yet there are already efforts in the works to fight the Department of Labor’s fiduciary rule, set to take effect April 10. On Friday, Representative Joe Wilson (R-S.C.) introduced a bill that would delay the effective date of the fiduciary rule by two years. And the House Education and Workforce Committee, led by Chairwoman Virginia Foxx (R-N.C.), said Thursday that the rule tops its list of the most reckless and harmful regulations.
“The Department of Labor’s fiduciary rule is one of the most costly, burdensome regulations to come from the Obama administration,” Wilson said in a statement. “Rather than making retirement advice and financial stability more accessible for American families, they have disrupted the client-fiduciary relationship, increased costs and limited access.
“This legislation will delay the implementation of this job-destroying rule, giving Congress and President-elect Donald Trump adequate time to re-evaluate this harmful regulation.”
Wilson’s bill seeks to delay the effective date of the rule to two years after “the date of enactment of this Act.”
The DOL released its final conflict of interest rule last April. The rule requires advisors overseeing retirement accounts to act under a fiduciary standard to put their clients’ interests ahead of their own. Some groups have filed suit against the DOL to have the rule overturned.
While President-elect Donald Trump himself has not been clear about his position on the Department of Labor’s fiduciary rule, a compliance burden on many b/ds, members of his team have been prominent critics. Anthony Scaramucci, a hedge fund manager and part of Trump’s transition team, said the rule would be repealed under a Trump presidency.
Several industry groups applauded the introduction of Wilson’s bill, the Protecting American Families’ Retirement Advice Act.
“We continue to believe the rule is harmful to the market and most importantly investors,” said Kenneth Bentsen Jr., president and CEO of SIFMA, one of the groups suing the DOL. “As our members have worked diligently to prepare for implementation, at great cost and with consequential impacts on retirement savers, a delay in applicability would be prudent to allow the new Congress and Administration to review a better course to protect investors.”
“The current rule is overly complex, involves too much red tape and is already negatively impacting consumer choice and service,” said Tim Pawlenty, CEO of the Financial Services Roundtable. “Rep. Wilson's bill will allow time for a less bureaucratic 'best interest' standard to be developed.”
On Thursday, the House Education and Workforce Committee released a statement, saying the fiduciary rule “makes it even more difficult for hardworking men and women to save for the future.”
“The Department of Labor’s fiduciary rule will significantly impact the ability of Americans to receive advice on how to save for retirement and make it more difficult for businesses, in particular small businesses, to establish retirement plans,” said Foxx.
The Committee is responsible for reforms that affect students, workers and retirees.
The Department of Labor’s overtime rule was also on the Committee’s list of bad rulemaking. The Obama administration rule was set to take effect Dec. 1, until a federal judge blocked the rule in November. It would have raised the salary threshold for overtime pay from $23,660 to $47,500. That would have extended mandatory overtime pay to more than 4 million salaried workers, according to Reuters.
The House Committee points to Regulation Rodeo, an online database of federal regulations, a project of the American Action Forum. The website says the DOL’s fiduciary rule would result in $31.5 billion in total costs, $2 billion a year and 56,833 paperwork hours.
The House passed a bill this week that would allow Congress to repeal any rule finalized in the last 60 days of the Obama administration. On Thursday, the House also passed the Regulations from the Executive in Need of Scrutiny Act of 2017, which would require Congress to approve all new major regulations.