Removing Barriers Blog

Senate Committee Releases Report on DOL Fiduciary Rule
Posted February 29, 2016 by CUNA Advocacy

The United States Senate Committee on Homeland Security and Government Affairs published a report entitled, “The Labor Department’s Fiduciary Rule: How a Flawed Process Could Hurt Retirement Savers.”

“The Labor Department’s rule threatens to harm low- and middle-income Americans by increasing the cost of investment advice,” Chairman Ron Johnson (R-Wis.) said. “Saving for retirement is important, and investing can be a complex process. Ensuring Americans’ access to investment advice will help them plan for retirement. Americans saving their hard-earned money shouldn’t face additional hurdles imposed by Washington.”

The Committee press release states that, “Johnson’s inquiry revealed that the Labor Department disregarded concerns and recommendations from career, nonpartisan, professional staff at the Securities and Exchange Commission (SEC), regulatory experts at the Office of Information and Regulatory Affairs (OIRA) within the Office of Management and Budget (OMB), and Treasury Department officials.”

According to the Committee, some key findings of the report are:

  • Career, nonpartisan SEC staff identified at least 26 items of concern related to the substantive content of the proposed rule, and the Labor Department declined to fully resolve all of the concerns.
  • After the Labor Department sought to address the SEC’s stated items of concern, a senior SEC official emphasized to the Labor Department that concerns remained, saying "[W]e continue to believe that commentators are likely to raise concerns that the proposal may result in reduced pricing options, rising costs and limited access to retirement advice, particularly for retail investors.  Commentators also may express concerns that broker-dealers, as a practical matter, may be unlikely to use the exemptions provided and may stop providing services because of the number of conditions imposed, likely compliance costs, and lack of clarity around several provisions.

We recently supported legislation seeking improvements to the DOL Fiduciary rule, which we expect to be finalized in the next few months.