Momentum seems to be building among House Democrats to raise questions regarding the Department of Labor’s (DOL’s) proposed fiduciary rule.
A letter circulated last week asks the DOL to make what the Democrats call “improvements” to the rule. Originally signed by nine House Democrats, that number has since grown to 90 lawmakers, Eric Harris, press secretary for Rep. Gwen Moore, D-Wis., said today. Moore has spearheaded the effort.
The DOL is accepting comments until the end of the day Thursday, and expects to publish a final rule likely early in 2016, observers have said.
Barbara Roper, director of investor protection for the Consumer Federation of America, which supports a tougher rule, said several of the letter signers have outright opposed a fiduciary-only rule in the past. She said the suggestions proposed in the Democrats’ letter could be easily adapted by the DOL.
Thus far, the fiduciary-only fight has pitted Republicans against the DOL and the White House, which claims retirement investment advice is costing Americans $17 billion annually. The GOP is working to defeat the rule on several fronts, and courting Democratic support is one avenue.
Roper added she is “cautiously optimistic” that the rule will be finalized.
“DOL isn’t going to back down unless Congress makes them, in my opinion, and we see less and less Democratic support for any such efforts,” she said.
The Democrats emphasized that they favor a fiduciary only rule – with modifications.
“We believe the department could accomplish the goals of the (best interest contract exemption) using a less prescriptive and more principle-based approach to implementation,” the letter states.
The lawmakers also said the rule should permit specific investment examples in investor-education materials, and should not restrict access to annuities.
Meanwhile, a DOL spokesman said that a formal letter has not yet been received, while adding that letters such as this are an important part of every notice and comment rulemaking. He noted that "members of Congress understand how important it is to ensure their constituents are receiving retirement investment advice that is in their best interest."