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House Committee Passes Bills to Halt DOL Fiduciary Rule

The House Committee on Education and the Workforce approved two bipartisan bills that could replace the Labor Department’s fiduciary proposal before it becomes law. The vote was split 22-14 along party lines with little Democratic support aside from the handful of lawmakers that co-sponsored each bill.

The “fiduciary rule” could redefine what the Employee Retirement Income Security Act considers a fiduciary and impose new mandates and regulatory requirements on financial advisors.

As reported by The DI Wire in December, The Affordable Retirement Advice Protection Act (H.R. 4293), introduced by Rep. Phil Roe (R-TN), and the Strengthening Access to Valuable Education and Retirement Support Act (H.R. 4294), introduced by Rep. Peter Roskam (R-IL) would require congressional approval before the DOL fiduciary rule goes into effect.

Chairman of the House Education and Workforce Committee, Rep. John Kline, R-Minn, said, “[the bills] are a bipartisan, consensus solution that will strengthen protections for retirement savers and ensure robust access to affordable retirement advice. It achieves the same goal as the Department of Labor’s proposal, but in a way that doesn’t hurt small businesses and working families.”

If Congress fails to approve the department’s regulatory proposal, a new fiduciary standard would take effect that:

• Raises the bar for the retirement services industry by requiring advisors to serve in their clients’ best interests;

• Requires advisors to clearly communicate key information to ensure investors are well-informed to make investment choices; and

• Ensures that individuals and families saving for retirement have access to advice and investment options to meet their individual needs and circumstances.

The proposals would amend the Internal Revenue Code of 1986 (The SAVERS Act) and the Employee Retirement Income Security Act of 1974 (ARAP Act).

The House Ways and Means Committee will hold a markup on the SAVERS Act today.

It is unclear at this time if the current bipartisan legislation will pass the House or the Senate. Political observers believe President Obama is pushing to have the Labor Department’s fiduciary rule implemented prior to his departure from office.