House Panel OKs Bill Repealing DOL’s Fiduciary Rule
A repeal of the Department of Labor’s fiduciary rule is now more likely as the House Financial Services Committee passes the Dodd-Frank overhaul bill, ThinkAdvisor writes. The bill now moves for a full House vote.
Yesterday, the committee passed the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs (CHOICE) Act following three days of heated debate, with a vote of 34 to 26, according to the publication. Among several provisions opposed by the Democrats in the bill are the repeal of the Volcker rule barring commercial banks from proprietary trading, curbing the power of the Consumer Financial Protection Bureau, and the repeal of the DOL’s fiduciary rule, which requires retirement brokers to put clients’ interests first, ThinkAdvisor writes. Under the CHOICE Act, sponsored by Rep. Jeb Hensarling, R-Texas, the SEC must issue its own fiduciary rule that would apply to all investment advisors before the DOL can roll out its version, according to the publication.
In applauding the panel’s vote, Tim Pawlenty, CEO of the industry group Financial Services Roundtable, said the SEC should assume “primary responsibility” in regulating investment advisors and broker-dealers’ services to retail investors, ThinkAdvisor writes. Pawlenty also said state insurance regulators should take up regulation of annuities and insurance products and their distributors, according to the publication.
In the days leading up to the vote, several consumer and investor advocacy groups and state securities commissions, including Maryland Securities Commissioner Melanie Lubin and Massachusetts’ Secretary of the Commonwealth William Galvin, had slammed the CHOICE Act’s provision to repeal the DOL’s rule. During debates, Democrats on the House committee had attempted to add several provisions, including one to preserve the DOL’s rule, but were rebuffed by the Republicans, Bloomberg writes.