A bipartisan group of lawmakers in both chambers of Congress have introduced resolutions to overturn the Department of Labor’s new fiduciary rule.

The resolutions seek to use the Congressional Review Act to overturn the rule, which goes into effect September 23 and expands and toughens ERISA fiduciary requirements for those who accept compensation for advising retirement investors on annuities and IRA rollovers.

The resolution was introduced in the Senate by Ted Budd, the Republican senator representing North Carolina; Joe Manchin, the Democrat senator representing West Virgina; Roger Marshall, who represents Kansas; and Bill Cassidy, the ranking Republican from Louisiana on the Senate Health, Education, Labor, and Pensions Committee.

In the House, the resolution is being championed by Republican representatives Rick Allen of Georgia and Virginia Foxx of North Carolina. Foxx is also chair of the House Committee on Education and the Workforce.  

“The Biden administration’s latest executive overreach would make it harder for working families to invest and prepare for their financial future,” Budd said in a statement.

The resolutions are supported by the insurance, annuities and broker-dealer industries, which would be swept up in the new rule. Under the rule, the DOL would require advisors to provide advice that is in the best interest of clients or face a ban of up to 10 years on doing rollovers.

Wayne Chopus, president and CEO of the Insured Retirement Institute, said in a statement that Congress should thwart the rule because it would make the retirement savings gap worse, throwing up barriers for workers seeking secure retirements.

Dale Brown, president and CEO of the Financial Services Institute, said in a letter to lawmakers that the trade group supported the resolutions as well, saying the rule “will limit retirement savers’ access to professional advice, products and services offered by independent financial advisors.” He added that the DOL rushed through the rulemaking process without providing stakeholders enough time to give substantive input on the rule’s consequences.

These two trade groups are among 13 that sent a letter of support to the senators leading the resolution push. The letter was also signed by executives from the American Council of Life Insurers, the American Securities Association and the National Association of Insurance and Financial Advisors.

Because the resolutions are brought under the Congressional Review Act, the DOL will have 60 days to submit a report on the rule to Congress.

From there, lawmakers have 60 days to submit a joint resolution of disapproval to fast-track a vote on the resolution.

Even if the resolution were passed by both the House and Senate, however, it’s likely to be vetoed by President Biden given his administration’s support for the new DOL. He and the department’s acting secretary, Julie Su, said the fiduciary rule was necessary to protect investors from “junk fees.” 

In March 2023, Biden killed a resolution to vacate the department’s ESG rule, which gave a green light to investment advisors selecting investments supporting environmental, social and governance standards.

The fiduciary rule is also being challenged in court by the Federation of Americans for Consumer Choice, an annuity and life insurance trade group, along with five insurance agents and firms. The plaintiffs filed a lawsuit against the rule in the U.S. District Court in Texas on May 3.

The industry lawsuit asks the court for an injunction during deliberations and to vacate the rule, arguing that it oversteps the DOL’s authority mandated by Congress to regulate insurance agents and broker-dealers, which have historically been excluded so that they can engage in onetime sales without triggering fiduciary requirements.

A rule passed under the Obama administration in 2016, which critics argue is similar, was vacated by the U.S. Fifth Circuit Court of Appeals in 2018.

Rep. Foxx called the new rule a “carbon copy” of the Obama-era rule and said it “reaches well beyond the department’s jurisdiction and attempts to regulate individuals’ choices for their own retirement savings.”

The DOL told reporters it “continues to believe that this rule is essential to ensuring that retirement investors are protected.”