If lawmakers fail to reach a consensus on an omnibus spending package by a January 19 deadline, they’ll be forced to approve another temporary spending bill (with 2017 spending limits) or risk a government shutdown.
Will The Rider Survive?
Micah Hauptman, the financial services counsel at the Consumer Federation of America, does not expect the rider to survive.
“Wall Street lobbyists have attempted to insert DOL fiduciary riders in spending bills for years,” he said. Democratic leaders Nancy Pelosi and Chuck Schumer, he added, “understand how disastrous a fiduciary rider would be for retirement savers and have been steadfastly opposed to the inclusion of a rider.
“I don’t anticipate any change in their commitment to preserving the rule.”
Proponents of killing the fiduciary rule, including the Financial Services Institute and SIFMA, declined to comment on the new attempt to dismantle the rule.
If the rule is quashed, however, some pundits do not expect the SEC to pick up the fiduciary gauntlet in a meaningful way.
“This is absolutely a different SEC,” said Rostad, referring to current chairman Jay Clayton. “We have not seen an SEC chairman speak so candidly and forcefully about disclosure taking the place of fiduciary standards as the answer to investor protection.”
Generally, industry and academic research have not found disclosure to be an effective investor protection when it comes to conflicts of interest warnings.
“There is no apology for not talking about the importance of a best interest standard,” Rostad said. “There is no serious argument that disclosure alone will work, and the other side has stopped even trying to make one.”