Obama administration vows to veto House resolution to kill DOL fiduciary rule

President Barack Obama will veto a House resolution designed to kill a Labor Department rule to raise investment-advice standards for retirement accounts, the White House said Wednesday.
MAY 10, 2016
President Barack Obama will veto a House resolution designed to kill a Labor Department rule to raise investment-advice standards for retirement accounts, the White House said Wednesday. The resolution is expected to come to the floor for a vote by the full House later this week after being approved April 21 on a party-line vote in the House Education and the Workforce Committee. The rule-change requires financial advisers to act in the best interests of their clients in 401(k), individual retirement accounts and other qualified plans. “It is essential that these critical protections go into effect,” the Office of Management and Budget said in a statement. “If the president were presented with [the resolution], he would veto the bill.” The OMB said the regulation would protect investors from conflicted advice that results in their purchasing high-fee investment products that erode their savings. It also said that the rule had been “streamlined to reduce the compliance burden and ensure continued access to advice.” (More: Coverage of the DOL rule from every angle) Financial industry groups sharply disagreed and supported the resolution in letters sent to Congress on Tuesday and Wednesday. Compliance "will be extremely complicated and expensive, resulting in increased consumer costs that will limit the services available to many modest-income investors,” eight industry interest groups wrote in a letter on Wednesday. “We strongly encourage Congress to use its authority to ensure the regulation, which includes a 208-page 'definition of fiduciary,' will not have an adverse impact on retirement savers.” The letter was signed by the Financial Services Institute, the Securities Industry and Financial Markets Association, the Financial Services Roundtable and the U.S. Chamber of Commerce among others. In a separate letter on Tuesday, the Investment Company Institute, which represents the mutual fund industry, said that the changes DOL made didn't go far enough. “While the Department's final rule reflects a number of modifications, the basic structure of the proposed rule remains intact,” Paul Schott Stevens, ICI president and CEO wrote. “Like the proposed rule, the final rule imposes significant new liability through a complicated, back-door regulatory regime that will have the effect of limiting available advice options for many savers.” The resolution is being advanced under the Congressional Review Act, which gives Congress 60 days after the release of a final rule to kill it. Supporters would have to garner two-thirds majorities in the House and Senate to overturn a veto.

Latest News

Judge OKs more than $90 million in settlement money for GWG investors
Judge OKs more than $90 million in settlement money for GWG investors

Mayer Brown, GWG's law firm, agreed to pay $30 million to resolve conflict of interest claims.

Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs
Fintech bytes: Orion and eMoney add new planning, investment tools for RIAs

Orion adds new model portfolios and SMAs under expanded JPMorgan tie-up, while eMoney boosts its planning software capabilities.

Retirement uncertainty cuts across generations: Transamerica
Retirement uncertainty cuts across generations: Transamerica

National survey of workers exposes widespread retirement planning challenges for Gen Z, Millennials, Gen X, and Boomers.

Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future
Does a merger or acquisition make sense for your firm? Why now is the perfect time to secure your firm’s future

While the choice for advisors to "die at their desks" might been wise once upon a time, higher acquisition multiples and innovations in deal structures have created more immediate M&A opportunities.

Raymond James continues recruitment run with UBS, Morgan Stanley teams
Raymond James continues recruitment run with UBS, Morgan Stanley teams

A father-son pair has joined the firm's independent arm in Utah, while a quartet of planning advisors strengthen its employee channel in Louisiana.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.

SPONSORED Beyond the dashboard: Making wealth tech human

How intelliflo aims to solve advisors' top tech headaches—without sacrificing the personal touch clients crave