At the White House’s behest, the Department of Labor is preparing to impose a new, one-size-fits-all regulation that would complicate something as fundamental as planning for retirement. The proposed rule seeks to expand the definition of a qualified “fiduciary”—a person who provides investment advice—in a supposed attempt to prevent “conflicts of interest” in financial advice.
Don’t be fooled. In reality, this rule would create more paperwork and record-keeping requirements for planners, meaning higher costs for consumers. It would also mean less access and fewer options for small businesses trying to get up and running and families looking for financial advice. According to one independent analysis, up to 7 million current Individual Retirement Accounts (IRAs) wouldn’t qualify for advice under these new standards, and “as a result, individual investors with small-balance accounts likely will lose access to retirement advice and support.”
It all sounds so familiar. As The Wall Street Journal explains, “This is looking like the perfect Obama Administration program: harming a law-abiding industry, making services more costly to the consumers it claims to be helping, and then encouraging them to become dependent on government programs that create new risks for taxpayers."
It’s also a familiar Obama administration rule in that it involves circumventing a bipartisan majority in the people’s House:
- In September 2015, nearly 100 Democrats sent a letter to DOL Secretary Thomas Perez expressing serious concerns over these new regulations.
- In October 2015, a bipartisan majority of the House passed Rep. Ann Wagner’s (R-MO) Retail Investor Protection Act—a bill to halt this rule until the SEC issues its own expected proposal on investment advice.
- Earlier this month, the Ways and Means and Education and Workforce committees approved Rep. Peter Roskam’s (R-IL) Strengthening Access to Valuable Education and Retirement Support (SAVERS) Act, which would require congressional approval of the DOL rule. A similar measure offered by Rep. Phil Roe (R-TN), Affordable Retirement Advice Protection Act, also passed the Education and Workforce Committee. Together, these bipartisan bills provide a workable alternative to the administration’s flawed proposal.
We are determined to do everything possible to protect consumers and stop this rule. We are also working on ideas to rein in our regulatory state for the bold, pro-growth agenda we will present to the country in the coming months.