Three House members introduced a resolution Tuesday that would kill the Labor Department's recently finalized rule on investment advice for retirement accounts.
Reps. Phil Roe, R-Tenn., Charles Boustany, R-La., and Ann Wagner, R-Mo., offered the measure under a law, the Congressional Review Act, that allows Congress to halt a rule within 60 legislative days of its release.
The final version of the controversial DOL measure, which requires financial advisers to 401(k) and individual retirement accounts to act in clients' best interests, was
launched April 6 and published in the Federal Register on April 8.
(More: Coverage of the DOL rule from every angle)
House Republicans, echoing financial industry assertions, claim the rule would make investment advice too expensive for investors with modest assets to attain.
“This new regulatory scheme will hinder access to retirement advice for low- and middle-income families and make it harder for small businesses to help their employees plan for retirement,” Mr. Roe said in a statement.
Advocates for the rule say it would curb conflicts of interest for advisers that lead them to recommend high-fee investments that erode retirement savings.
The House action comes a day after
32 senators supported a similar resolution in that chamber. The measures can be approved with a simple majority in each house. They face an almost certain veto from President Barack Obama, who has given strong backing to the DOL rule.
It's unclear whether the resolutions would garner enough Democratic support to override a veto. Nearly 100 House Democrats wrote a letter to DOL last year, outlining concerns about the rule, as did more than a dozen Democratic senators.
But DOL made
substantial changes to the final rule, compared with the original proposal introduced a year ago, in response to criticisms from the financial industry and other groups.
Those modifications have muted the industry for the moment, as it reviews the final rule. Wavering Capitol Hill Democrats so far seem to have stayed on board with the DOL rule.
But a new industry group, the Equity Dealers of America, came out in support of the House and Senate resolutions Tuesday.
“This rule confuses investors, interferes with individual investment decisions and taxes the retirement dollars of hardworking Americans, and we applaud Congress for moving so quickly to stop it,” EDA chief executive Chris Iacovella, said in a statement.
The EDA said it “exclusively represents the equity market interests for the retail and institutional operations of its middle-market financial services firm members.”
The House resolution is scheduled for a vote in the Education and Workforce Committee on Thursday morning.
Meanwhile, legislation written by Mr. Roe and Rep. Peter Roskam, R-Ill., that would
halt the DOL rule and replace it with a fiduciary duty approach written by lawmakers has made its way to the House floor. It's not clear when a vote on the combined bill will be scheduled.
The DOL probably could not have done anything short of withdrawing the proposed rule to mollify Republican opponents on Capitol Hill.
In an interview on the day the DOL final rule came out, Mr. Roskam said that the industry, rather than government, should be responsible for coming up with standards of client care.
“The better approach is to put the burden on industry: 'You've got to create products that are in the clients' best interests,'” Mr. Roskam said.
