In a party line vote, the House Education and the Workforce Committee approved legislation on Wednesday that would kill the Labor Department fiduciary rule and replace it with an advice standard based on disclosure.
It wasn't the only effort in the House on Wednesday to take the DOL rule off the books. Later in the day, the House Appropriations Committee was expected to approve a DOL spending bill that would prevent the agency from funding the enforcement of the fiduciary rule.
The disclosure bill also likely will be voted on by the House Ways and Means Committee before it is taken up by the full chamber. Meanwhile, the House Financial Services Committee also is working on legislation that would eliminate the DOL rule and replace it with a best-interest standard outlined in that bill that would be proposed by the Securities and Exchange Commission.
The House bills are likely to continue to advance. But their prospects are much weaker in the Senate, where Democrats have enough members to sustain a filibuster. Democrats have remained united behind the DOL regulation.
Republican supporters of the bill before the Education and the Workforce Committee, said that the DOL rule, which requires financial advisers to act in the best interests of their clients in retirement accounts, would disrupt the retirement-advice market.
The DOL regulation "is completely unworkable and so complicated and burdensome that it will cause millions of Americans to lose access to their trusted advisers," said Rep. Virgina Foxx, R-N.C., and chairwoman of the committee. Her arguments echoed those of financial-industry opponents of the rule.
The measure, written by Rep. Phil Roe, R-Tenn., establishes a best-interest standard fulfilled by disclosures. Supporters of the DOL rule assert that it has the teeth to mitigate adviser conflicts that lead to the sales of inappropriate high-fee investments that erode savings.
Rep. Bobby Scott, D-Va., and ranking member of the committee, said that the DOL regulation would protect investors better than Mr. Roe's legislation.
"The bill being marked up today proposes a far weaker, loophole-ridden standard that unscrupulous advisers could easily skirt simply by issuing boilerplate written disclosures," Mr. Scott said.
Mr. Roe said that there is evidence of the damage being done by the DOL rule since it was finalized during the Obama administration in April 2016.
"Firms are starting to eliminate more affordable retirement-account options in favor of fee-based plans that are out of reach for many families with lower incomes," Mr. Roe said. "We can pass legislation to fix this fiduciary mess while enhancing protections for retirement savers at the same time."
Mr. Scott offered an optimistic assessment of the effects of the DOL rule.
"What we've seen so far does not confirm the opponents' claims and doomsday scenarios that have been made in the past," Mr. Scott said. "What we've seen is the financial industry adapting to and complying with the fiduciary rule."