Washington, D.C. – In an important victory for American workers and retirees, Congress announced early today that it had reached an agreement on an omnibus funding bill that does not include a policy rider halting the Department of Labor’s rulemaking to improve protections for retirement savers. Financial firm lobbyists had sought to use the funding bill to defund or derail the rule, and inclusion of a rider halting the DOL rule had been identified as a priority by Republican leaders negotiating the final funding package.
“Financial firms have mounted one of the most aggressive lobbying campaigns in recent memory to defeat a rule that would require them to put their customers’ interests first when providing retirement investment advice,” said CFA Director of Investor Protection Barbara Roper. “Had they succeeded in getting a policy rider included in this must-pass bill, hopes that workers and retirees would finally get the protections they deserve when they turn to financial professionals for retirement investment advice would have been dashed. We are enormously grateful that Congress chose to stand up to the special interests and stand with workers and retirees on this issue of immense importance to their retirement security. It could not have happened without the unwavering support from House Minority Leader Nancy Pelosi, Senate Minority Leader Harry Reid, and the White House.”
The Department of Labor rule would close loopholes in the regulations defining investment advice under the Employee Retirement Income Security Act, causing more financial professionals to be held to a fiduciary standard when providing such advice. At the same time, it would loosen restrictions on the types of compensation such advisers can receive, as long as they are held to a legally binding best interest standard, charge only reasonable fees, and eliminate practices that encourage and reward advice that is not in the customer’s best interests.
“Even as we celebrate this important victory, it is important to remember that, with billions of dollars of excess profits on the line, we have no doubt industry opponents will continue to seek every opportunity to kill this rule,” said CFA Financial Services Counsel Micah Hauptman. “Members of Congress must continue to stand with their constituents who are saving for a secure and dignified retirement in the face of this persistent industry opposition.”
Contact: Barbara Roper, 719-543-9468; Micah Hauptman, 202-939-1004
CFA is an association of more than 250 nonprofit consumer groups that was founded in 1968 to advance the consumer interest through research, advocacy and education.