House Passes Legislation to Halt DOL Fiduciary Rule
The House approved legislation on Thursday that seeks to repeal certain Dodd-Frank banking and securities regulations, as well as the Department of Labor’s fiduciary rule that begins implementation today. The Financial CHOICE Act 2.0, introduced by Rep. Jeb Hensarling (R-TX), passed in a 233-186 vote along party lines, with Walter Jones (R-NC) as the only dissenting Republican. House and Senate republicans also introduced separate bills yesterday to halt the fiduciary rule.
Democrats dubbed the bill the Wrong Choice Act, while republicans maintain that it will end taxpayer-funded bailouts of large financial institutions; impose tougher penalties on those who commit financial fraud and insider trading; demand greater accountability from Washington regulators, and relieve well-capitalized banks from certain regulations.
The Financial CHOICE Act also seeks to repeal the final DOL fiduciary rule and its related prohibited transaction exemptions. If the bill passes, it would restrict the DOL from promulgating similar regulations until 60 days after the SEC issues its own fiduciary standards of conduct for broker-dealers and investment advisors.
Rep. David Scott (D-GA) called the bill “dangerous” and said that Senators have assured him that it is “dead on arrival” when the Senate’s yet to be scheduled vote takes place.
Also on Thursday, Rep. Phil Roe (R-TN) and Rep. Peter Roskam (R-IL) introduced the Affordable Retirement Advice for Savers Act (H.R. 2823) which would repeal the Obama administration’s fiduciary rule and establish a statutory definition of “investment advice.”
In the Senate, Sen. Johnny Isakson (R-GA) and six fellow Republican senators reintroduced the Affordable Retirement Advice Protection Act (S.1321) which also seeks to stop the implementation of the fiduciary rule and provides an alternative to the rule.
Earlier this week, Labor Secretary Alexander Acosta sat before a House Appropriations subcommittee during a budget hearing and disclosed that the DOL has taken the first step in the review that was directed by President Trump earlier this year.
Last week, SEC chairman Jay Clayton issued a request for public comment on standards of conduct for investment advisers and broker-dealers that provide investment advice to retail investors.