House lawmakers approved a spending bill Thursday that included a provision to kill a Labor Department regulation to raise investment advice standards for retirement accounts.
The move demonstrates that opponents of the rule are not giving up on legislative attempts to quash it.
The measure before the House Appropriations subcommittee with jurisdiction over the DOL contained a rider to prevent the agency from enforcing the DOL rule, which requires financial advisers to 401(k)s, individual retirement accounts and other qualified accounts to act in their clients' best interests. The Republican majority on the panel virtually ensures that the provision will be OK'd by the full committee, too.
A Democratic amendment to remove the DOL rider and others attached to the bill failed.
The sponsor of the amendment, Rep. Barbara Lee, D-Calif., said Congress should not “legislate” on an appropriations bill. She asserted that killing the DOL rule would hurt retirees. The Obama administration asserts that the regulation protects investors from being sold high-fee investments that erode savings.
“Families won't be able to retire with dignity [and] enough retirement money after decades of work, if this bill passes,” Ms. Lee said.
The chairman of the subcommittee, Rep. Tom Cole, R-Okla., said the DOL rule would deprive investors with modest assets of investment advice, echoing the financial industry argument that the rule would raise regulatory and liability costs for advisers and make advice much more expensive.
“As always, one person's poison pill is another person's action to rein in over regulation,” Mr. Cole said of the riders.
The full Appropriations Committee could act on the bill before the congressional summer recess later this month. A Senate bill that would fund the DOL does not contain a rider targeting the fiduciary rule.
The appropriations process is likely to culminate this fall or winter in an omnibus funding bill for fiscal 2017. An attempt to attach a provision to the fiscal 2016 omnibus to stop the DOL rule failed last year.
Earlier this spring, the House and Senate approved a resolution to kill the DOL rule. But both votes fell short of the super-majority support required to overcome President Barack Obama's veto.
Opponents of the rule also have filed five lawsuits against the regulation.