The U.S. Senate on Tuesday will take up, and likely pass, a resolution to repeal a new Labor Department rule aimed at protecting retirement savers from profit-hungry brokers, a move that President Barack Obama has threatened to veto.
A notice sent to senators on Monday showed that a debate and vote on the resolution were scheduled for Tuesday morning, less than a week before the chamber recesses for the Memorial Day holiday. The vote requires a simple majority, which Republicans command in both houses of Congress. The House of Representatives passed its version of the resolution last month, in a vote along party lines.
But the resolution will have a short life span. Obama has threatened to veto legislation undoing a key financial initiative of his second term. His administration in April released the rule to set a fiduciary standard for financial brokers who sell retirement products, requiring them to put clients' best interests ahead of their bottom lines.
Republican leaders and some in the financial industry said complying with the rule would be expensive for brokers and result in higher costs for retirement advice that many Americans could not afford. They also said the rule did not take into account other laws and regulations on financial advice.
The Senate fight started early, with Senator Elizabeth Warren, a Democrat from Massachusetts, saying on Monday that Republicans wanted to "make it easier -- easier -- for giant Wall Street financial institutions to cheat Americans out of their retirement savings."
Speaking on the Senate floor, the advocate for stricter financial regulation also said the vote was motivated by election-year politics and that the resolution "will sure help fill up the campaign accounts of the Republican senators who vote for it."
Senate Poised To Vote Today To Repeal New DOL Rule
May 24, 2016
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Comments
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How many times does the government have to put an entire industry in the penalty box for the bad behavior of a few. We see this everywhere. Instead of executing meaningful monitoring and prosecution of the bad guys, we instead over regulate. And in the end who pays for the over regulation??? Thats right the client does. Most of us are honest hard working middle class folks trying to figure out how to save a couple bucks for our kids college and maybe retire one day. I love the comment below... "who cares if it costs the brokers a little more to provide competent and unbiased advice to their clients". I already provide competent unbiased advice to my clients, I will just make less money doing it now... Oh I guess you thought this would come out of the publicly held brokerage earnings somehow? Not likely... This over regulation will come from the pockets of the Financial advisors and their clients. I doubt it will stop any bad behavior of the few either. That will only occur when real painful fines that truly effect earnings are imposed, not a bunch of new rules to make things more confusing then they already are.
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I wish that those that feel qualified to comment on the DOL rule were required to be involved in all the comment periods over the last 6 years. I should also not that apparently DOL does not have sufficient foundation in retirement planning to understand exactly what the provided comments were saying. It should also be noted that the DOL initiative originated with a DOL staff guy producing a study based on flawed "fact" and assumptions including "facts" like the Federal Gov't thrift savings Plan (TSP) (the government 401K) only costing participants 25 cents per $1000 when in reality according to the Office of Management and Budget the total operating cost for the TSP exceeds 8% and the cost the staff person incorrectly addressed was the 25 basis point fee the Government TSP administrator charges to administer the government side of the TSP program. I have commented about the merits of the DOL rule many times in the past and it is no more valid today than anytime over the last 6 years they have been trying to get it in effect
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Are you kidding me? How many times does the Republican Party have to shoot itself in the foot for them to realize they are supposed to be representing their constituents rather than the financial industry. How difficult is it to have a rule or law that basically says a financial advisor or broker or investment advisor must put the interests of his clients first and foremost. This isn't rocket science but it certainly is one of the reasons the Republicans have got their backs up against the wall in dealing with their constituents on a daily basis. If the Republicans are to recapture the presidency they are going to have to begin to think about theirconstituents rather than themselves which apparently is damn near close to impossible based upon their desire to be reelected. It s an absolute tragedy that the Republicans would put forth a bill that would go contrary to the best interest of their constituents to protect t them against unscrupulous financial professionals. Who cares if it cost the brokers a little more to provide competent and unbiased advice to their clients. The brokerage industry has been fighting this for years and it is time for the Republicans to step forward and take their heads out of their asses and think about their constituents and not their reelection opportunities.
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The new DOL Rules will harm, not protect, retirement savers. All direct rollovers from employer sponsored retirement plans and all IRA asset transfers will require that financial firms that offer retirement products, such as fixed index annuities, and financial advice sign a Best Interest Contract Exemption with new clients. These BICE agreements subject the financial firms to individual and class action lawsuits for almost anything that plaintiffs and their lawyers might feel is not in the retirement savers' best interests, including market declines. Importantly, fincancial professionals who are supposed to only represent clients' best interests are exempt from any lawsuits under the BICE. The result we will soon see is that financial firms will remove some of their best financial products from the market and also scale back, if not discontinue, working with independent financial professionals. How will these DOL Rules then be in the best interests of retirement savers? DOL rules were promulgated without a Congressional mandate, and without being passed into law by Congress. Congress during this administraton, or certainly in next administration, should repeal the DOL Rules before they take hold and do serious harm to not just small account retirement savers, but to almost every American with an IRA, or who someday needs to own an IRA. Frank P, CLU, ChFC
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"The U.S. Senate on Tuesday will take up, and likely pass, a resolution to repeal a new Labor Department rule aimed at protecting retirement savers from profit-hungry brokers..." Now why would Republicans or Democrats be against protecting investors? Deregulation expands the economy, then there needs to be re-regulation to adjust to current conditions. The economy is going to be cyclic, and regulations should also. Harvard Law Review Deregulation: A Major Cause of the Financial Crisis The articles in this issue explore the importance of government regulation of business in protecting the health and welfare of the American people. - http://goo.gl/lUHSCH & http://goo.gl/TkNsSz SEC Chairman Cox Admits Deregulation Caused Crisis President Bush Appointee Christopher Cox admitted the credit crisis was due to deregulation. http://tinyurl.com/7frecql