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House of Representatives Votes to Kill Dept. of Labor Fiduciary Rule

The U.S. House of Representatives passed legislation Tuesday night to block the Labor Department’s controversial fiduciary rule that proposes to raise investment advice standards. Opponents of the proposed fiduciary rule claim it would result in higher cost for investment advice, thereby pricing out many lower and middle income Americans from the professional assistance of financial advisors. Introduced by Representative Ann Wagner (R-Mo.), H.R. 1090 passed mostly along party lines in a 246-184 vote.

Dubbed the Retail Investor Protection Act of 2015, Wagner’s bill seeks to prohibit the Labor Department from moving forward on its proposed rule defining what is considered a fiduciary until 60 days after the Securities and Exchange Commission issues its own fiduciary rule, which has been under discussion for years and is not expected in the near future. According to the bill, before the SEC can promulgate its own rule, it must first conduct a review of whether such a rule would reduce confusion or harm and publish its findings in the federal register.

In a statement issued by the Executive Office of the President on Monday, the Obama administration said that H.R. 1090 “would derail an important Department of Labor rulemaking critical to protecting Americans’ hard-earned savings and preserving their retirement security.” The statement also indicated that “if the President were presented with [the bill], his senior advisors would recommend that he veto.” Political observers believe President Obama is pushing to have the Labor Department’s fiduciary rule implemented prior to his departure from office in January 2017.

The Senate has shown no indication that it will take up a companion bill to H.R 1090.