Washington INsider

Washington INsiderblog

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

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

Sep 21, 2016, 2:35 PM EST

Opponents of DOL fiduciary rule hurt by Wells Fargo woes

By Mark Schoeff Jr.

Wells Fargo chief executive John Stumpf achieved a rarity in Washington on Tuesday: bipartisan consensus.Unfortunately for him, the agreement across the aisle at a Senate Banking Committee hearing was that Wells Fargo failed to do what's right for its retail banking customers. Although the investment advice unit of the bank has not been implicated in the problem, Mr. Stumpf's appearance on Capitol Hill was a setback for opponents of a Labor Department rule that raises advice standards for retirement accounts.Mr. Stumpf endured almost three hours of testimony centering on Wells Fargo's $185 million fine from the Consumer Financial Protection Bureau and other regulators for opening about two million unauthorized accounts, and for their related fees, that led to the firing of about 5,300 Wells Fargo employees.For the CEO, it was a combination of being raked over the coals and drawn and quartered.Leading the charge, of course, was Sen.... Read full post

Aug 26, 2016, 3:26 PM EST

Judge's questions show inclination to uphold DOL fiduciary rule

By Mark Schoeff Jr.

Federal judge Randolph Moss didn't state his position Thursday regarding how he will rule on a lawsuit against a major Labor Department investment-advice regulation.But his questioning of plaintiffs and defense attorneys during a hearing that lasted more than three hours indicated he is probably leaning toward upholding the regulation and not granting the preliminary injunction being sought by the National Association of Fixed Annuities.If Mr. Moss denies a preliminary injunction, the case wouldn't die at that point, but NAFA would be unlikely to continue pursuing it at the district level because the case wouldn't be decided until well after the DOL rule must be implemented next spring. NAFA instead would likely seek an expedited appeal. This is the first of the five lawsuits against the DOL rule to be given a hearing. The next one, also a preliminary injunction motion, will be held Sept. 21 in a Kansas federal court. A separate... Read full post

Jun 27, 2016, 4:01 PM EST

Based on new Hensarling bill, GOP not keen on SEC fiduciary rule after all

By Mark Schoeff Jr.

Capitol Hill Republicans have said for years they wanted the Securities and Exchange Commission to proceed before the Labor Department in proposing a rule to raise investment advice standards.They bemoaned and tried to kill the DOL's rule, which applies only to retirement accounts. It was finalized in April — before the SEC even made a proposal. But if the House GOP gets its way, the SEC may be delayed even further before getting its own version out the door — raising a question about how much Republicans really want to see the SEC issue its own rule.House Financial Services Committee Chairman Jeb Hensarling, R-Texas, last week released a discussion draft of legislation that would replace the Dodd-Frank financial reform law. It would overhaul every section of the measure, including the one that authorizes the SEC to promulgate a fiduciary duty rule.(More: Everything you need to know about the DOL fiduciary rule as it... Read full post

Jun 13, 2016, 3:39 PM EST

Fiduciary duty finally hits mainstream — and Main Street

By Mark Schoeff Jr.

For most of the last six years, the battle over a Labor Department rule to raise investment advice standards for retirement accounts has been waged inside the Beltway in Washington.Attacking and defending the rule has taken place in the capital's hearing rooms, conference rooms and backrooms — although they're no longer smoked-filled.Even when President Barack Obama elevated the issue with his personal involvement early last year, it was still a matter that consumed regulators and the industry — not the public.But Sunday night may have marked a turning point in getting the topic in front of the people who both proponents and opponents say they are trying to help: investors. In his HBO show “Last Week Tonight,” John Oliver, a satirist and former regular on Comedy Central, devoted a whole segment to the DOL fiduciary rule. Shortly after seeing graphic violence on “Game of Thrones,” the channel's... Read full post

May 10, 2016, 6:09 PM EST

This insurance group likely to be first to file DOL fiduciary lawsuit

By Mark Schoeff Jr.

Like horses running in the upcoming Preakness, financial industry trade associations may be off to the races on lawsuits against the recently released Labor Department investment advice rule.While the others prance around, it looks as if the American Council of Life Insurers has entered the gate.“The ACLI board of directors has approved exploring the details of a legal challenge to the Department of Labor's fiduciary regulation,” ACLI spokesman Jack Dolan said in a statement responding to an InvestmentNews inquiry. “ACLI will make strategic decisions based on further direction given by our member companies.”This statement reads like the first concrete indication from a financial industry lobbying group that a lawsuit is imminent. It's not likely ACLI staff will return to the board and say, “About that suit – never mind.”The clock is ticking. The effective date of the regulation is June 7. It's... Read full post

Apr 25, 2016, 9:21 AM EST

Lawsuits against fiduciary rule likely to cite DOL's lack of authority

By Mark Schoeff Jr.

So far, all's quiet on the court front when it comes to the recently finalized Labor Department rule to raise investment advice standards for retirement accounts.Three groups that might file a lawsuit against the rule — the Insured Retirement Institute, the American Council of Life Insurers and the U.S. Chamber of Commerce — indicated Monday they're still reviewing the 1,023-page regulation and haven't made a decision on whether to take legal action.“We are reviewing our legal options with our outside counsel, Wilmer Hale,” Jack Dolan, spokesman for the American Council of Life Insurers, wrote in an email. “No decisions have been made at this point.”The IRI and Chamber also said they're still wading through the rule, which was released on April 6, and have not yet made decisions on what to do next.Like the endless speculation about this week's NFL draft, it's never too early to prognosticate about... Read full post

Feb 5, 2016, 3:49 PM EST

Just how much is Hillary Clinton raking in from Wall Street, and what does it mean for advisers?

By Mark Schoeff Jr.

Follow the money. It's advice that's applied to solving crimes as well as determining how politicians will vote and which issues they will support.Sometimes, though, following the money in politics can lead to a dead end — or at least a crossroads. Campaign donations are not always a decisive variable. Democratic presidential candidate Hillary Clinton is getting pummeled by her rival for the nomination, Vermont Sen. Bernie Sanders, over the amount of money she's receiving from the financial industry. Indeed, it's a lot: $17 million so far, according to the Center for Responsive Politics.Ms. Clinton maintains that the campaign largesse won't lull her to sleep on Wall Street reform. She says her plan is the toughest one being offered. Her claim that she can take industry money with one hand and administer tough policy with the other is supported by at least one stance that affects investment advisers and brokers directly. Ms.... Read full post

Jan 13, 2016, 2:58 PM EST

Don't read too much into Obama ignoring DOL fiduciary in State of the Union address

By Mark Schoeff Jr.

President Barack Obama told the nation on Tuesday night that he wants American workers to carry their retirement savings with them wherever their career path leads. But he didn't mention what should happen if they take their savings to a financial adviser. Like many people working in or writing about the investment advice business, I was anticipating that Mr. Obama would use his last State of the Union message to highlight a Labor Department rule that would raise advice standards for retirement accounts. A mention from Mr. Obama, its highest-profile supporter, would have given added momentum to the measure, which was introduced last April and survived an attempt by lawmakers to stop it in the recent omnibus spending bill. At one point, it seemed as if he was on the verge of invoking the DOL rule. In talking about improving “economic security,” he mentioned retraining and wage insurance and retirement plan portability.... Read full post

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