Washington INsider

Washington INsiderblog

Mark Schoeff Jr. looks at what's really happening on Capitol Hill - and the upshot for advisers.

Apr 28, 2017, 2:55 PM EST

The SEC would have to jump through hoops to get approval for its own fiduciary rule

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By Mark Schoeff Jr.

Republican lawmakers and financial industry opponents of the Labor Department's fiduciary rule repeatedly say — almost like a mantra — that the Securities and Exchange Commission is the place where such a regulation should originate.The DOL rule, whose implementation has been delayed until June 9, would require financial advisers to act in the best interests of their clients in retirement accounts. But the SEC has jurisdiction over securities regulation, and if it sets advice standards, they would apply to all retail investment accounts, DOL-rule foes argue.Their preferred starting place for a fiduciary rule would be codified in the Financial CHOICE (Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs) Act, a nearly 600-page bill that would overhaul the Dodd-Frank financial reform law. The measure, written by House Financial Services Committee Chairman Jeb Hensarling, R-Texas, likely will be approved... Read full post

Feb 27, 2017, 2:39 PM EST

Fate of fiduciary rule rides on regulators' political savvy

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By Mark Schoeff Jr.

Politics and policy are inextricably linked in Washington. The former is always required to make any substantive advances in the latter. Regulation of financial advice is primary example — and two recent developments show why.On Friday, Securities and Exchange Commission Acting Chairman Michael Piwowar made his first major address while serving in his temporary position. A former Republican aide on the Senate Banking Committee, Mr. Piwowar showed that he has a pretty good grasp of politics.First, the theme of his speech was the "forgotten investor." The term is a variation the "forgotten man and woman" to whom President Donald Trump refers frequently when framing his governing approach. Using the "forgotten investor" trope helped tie Mr. Piwowar's vision for the SEC to the new Republican administration. My guess is that's what Mr. Piwowar intended. Despite the ephemeral nature of his "acting" title, Mr. Piwowar has taken action... Read full post

Feb 16, 2017, 5:09 PM EST

Awaiting new Labor secretary, staff takes on larger role in fiduciary rule's fate

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By Mark Schoeff Jr.

In Washington, it is often said that personnel is policy. When it comes to the Labor Department's fiduciary rule, the lack of Trump administration appointees at the agency is adding to uncertainty surrounding the rule.Fast-food executvie Andrew Puzder withdrew Wednesday as President Donald Trump's nominee for Labor secretary less than 24 hours before his long-delayed hearing was to be held before the Senate Health, Education, Labor and Pensions Committee. On Thursday, Mr. Trump announced his new nominee, Alexander Acosta, dean of the Florida International University law school and a former U.S. Attorney for the Southern District of Florida. His confirmation process is not likely to conclude until well into March. While the new administration tries to find its footing, the April 10 implementation date for the DOL rule, which raises investment advice standards in retirement accounts, is bearing down. A DOL proposal to delay the... Read full post

Feb 6, 2017, 6:39 PM EST

What's next for the DOL fiduciary rule

By Mark Schoeff Jr.

It's fitting that the drama surrounding a Labor Department investment advice rule continues to play out this week and perhaps for months to come just like a reality television show, a genre perfected by President Donald Trump.The presidential memo to DOL that Mr. Trump signed last week instructed the agency to review the regulation, which would require financial advisers to act in the best interests of their clients in retirement accounts. It calls on DOL to assess, among other things, whether the rule prevents retirement savers from accessing advice or threatens financial firms with a flurry of lawsuits — two arguments the industry often makes in attacking the rule. If the agency finds that harm is being done to investors or firms, it can then modify or replace the measure through a rulemaking process.What Mr. Trump's memo does not do is delay the rule's April 10 implementation date. That step must be taken by Acting DOL... Read full post

Jan 31, 2017, 11:56 AM EST

DOL fiduciary rule not yet caught up in Trump maelstrom

By Mark Schoeff Jr.

President Donald Trump has been the disrupter that he promised to be.He is signing executive orders at a pace that makes former President Obama look desultory. His latest ones — on immigration and the makeup of the National Security Council — have sparked nationwide protests and bipartisan consternation on Capitol Hill. But what Mr. Trump has not touched — so far — in this maelstrom is a Labor Department regulation that would raise investment-advice standards for retirement accounts.When Mr. Trump was inaugurated, the financial industry had high hopes that delaying the DOL rule would be one of the first items that the new president addressed. It's now Day 10, and we haven't seen anything.Last week at the Financial Services Institute annual conference in San Francisco, FSI president and chief executive Dale Brown emphasized that FSI had been in contact with the Trump transition team to ensure that the DOL rule... Read full post

Jan 23, 2017, 3:05 PM EST

Lawsuits could be used to delay DOL fiduciary rule

By Mark Schoeff Jr.

Supporters and opponents of a Labor Department investment-advice rule continue to sit on the edge of their chairs waiting for the newly minted Trump administration to address the regulation — a move that could be related to several lawsuits under way in courts across the country. Last Friday, White House chief of staff Reince Preibus issued a memo to acting agency heads telling them to delay rules that haven't been finalized or were recently finalized. That routine action by a new administration did not apply to the DOL regulation because it became effective last June. The initial implementation date of the measure, which would require financial advisers to act in the best interests of their clients in retirement accounts, is April 10. But the DOL rule is not out of the woods and could be the subject of a separate directive.“We don't know anything for sure,” said a Washington-based industry representative. “It... Read full post

Dec 20, 2016, 5:41 PM EST

Death of DOL fiduciary rule could spur SEC action on uniform standard

By Mark Schoeff Jr.

Almost everyone is anticipating that the incoming Trump administration will try to kill — or at least delay — a Labor Department investment advice rule. If it does, it could be a catalyst for the Securities and Exchange Commission to finally break out of its stasis on the issue.The conventional wisdom is that the Labor regulation, which requires financial advisers to act in the best interests of their clients in retirement accounts, is doomed, and that the SEC under a Republican majority will continue to leave untouched its authority to promulgate a fiduciary regulation applying to all retail investment advice.But financial industry opponents for years have tried to stop the DOL rule by asserting that the SEC, not the DOL, is the primary securities regulator. It should go first, they say, with a regulation that imposes a uniform best-interest standard on brokers and investment advisers, raising the bar for brokers.We could... Read full post

Dec 13, 2016, 2:43 PM EST

Chamber of Commerce urges Donald Trump to take 'immediate action to undo' DOL fiduciary rule

By Mark Schoeff Jr.

The U.S. Chamber of Commerce this week broke the relative silence of financial industry lobbying groups and called for the incoming Trump administration to take “immediate action to undo” a Labor Department investment-advice rule.It's a stance that most assumed industry trade associations would take, but they seem to be having trouble coming up with a precise “ask” for the Trump administration regarding the DOL rule, which would require financial advisers to act in the best interests of their clients in retirement accounts. The Chamber stepped into the void and made clear that it wants the Trump administration to put the rule at the top of its to-do list — or rather its “undo” list.“[W]e are urging immediate action to undo the Department of Labor's Fiduciary Rule,” Chamber President Thomas J. Donohue wrote in a Dec. 12 blog post. “If enacted, it would choke economic growth,... Read full post

Dec 2, 2016, 9:27 AM EST

Senate Democrats control fate of DOL fiduciary rule

By Mark Schoeff Jr.

On Capitol Hill, the Senate is sometimes called the place where House bills go to die. The fate of a Labor Department investment advice rule could hinge on whether Senate Democrats intend to make the upper chamber the graveyard for efforts to repeal the regulation.Unlike the cumbersome regulatory process required to replace the rule or the vagaries of the courts, a legislative move is the quickest, cleanest route to its demise. But Senate Democrats are likely to hold together well enough to ensure the rule is modified rather than taken off the books. House Financial Services Committee Chairman Jeb Hensarling, R-Texas, already has his guns blazing at the measure, which would require financial advisers to act in the best interests of their clients in retirement accounts.His bill overhauling the Dodd-Frank financial reform law contains a provision that is essentially a bill written by Rep. Ann Wagner, R-Mo., that would halt the DOL rule... Read full post

Sep 26, 2016, 6:13 PM EST

Financial industry rhetoric riles DOL officials

By Mark Schoeff Jr.

Despite years of intense opposition, a Labor Department regulation that would raise investment advice standards for retirement accounts is marching toward implementation.It's not yet clear if the financial industry's Hail Mary pass to stop the final rule in court will be completed in the end zone. But even if it loses the war over the rule, financial firms continue to win rhetorical battles — and get under the skin of agency officials.You have to listen closely to know that DOL deputy assistant secretary Tim Hauser is upset. He doesn't often deviate from his low-key, affable demeanor, and usually has to use a declarative sentence to indicate he's mad. But he did so during a Sept. 16 panel at the Financial Planning Association's annual conference in Baltimore. He said he's heard from investors who have been told by their brokers that the broker can no longer work with them in a commission-based account.But the DOL rule doesn't... Read full post

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