More opposition to the Department of Labor’s new fiduciary rule surfaced today in the form of a resolution of disapproval under the Congressional Review Act, introduced in both the House and the Senate.
The CRA resolution seeks to overturn “a flawed rule from the Department of Labor (DOL) that would endanger financial choice and access,” the House and Senate sponsors said in a joint statement issued today.
Today’s CRA comes on the heels of the first legal challenge to the recently finalized Department of Labor (DOL) regulation, “Retirement Security Rule: Definition of an Investment Advice Fiduciary.” The Federation of Americans for Consumer Choice (FACC), along with several independent insurance agents, filed a lawsuit on May 2 in the U.S. District Court for the Eastern District of Texas requesting that the Court vacate the 2024 Fiduciary Rule and amended PTE 84-24 in their entirety, and to preliminarily and permanently enjoin the DOL from enforcing either of them.
Senators Ted Budd (R-NC), Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, Joe Manchin (D-WV), and Roger Marshall, M.D. (R-KS) introduced the resolution of disapproval in the Senate.
The resolution claims the new fiduciary rule threatens to gut a wide range of financial tools that many of the largest financial planning and wealth management firms currently offer consumers, including basic financial education and investment planning courses, life insurance, annuity plans, and other financial instruments.
“The Biden administration is imposing burdensome regulations that restrict investing opportunities, especially for lower-and middle-income Americans,” Ranking Member Cassidy said. “Americans should be encouraged to save by, among other things, minimizing hassle. This is whether they are saving for retirement, a child’s education, or for the unexpected life event. This CRA stops the Biden administration from making it harder for Americans to invest in their future.”
Other Senate co-sponsors include Senators Kevin Cramer (R-ND), John Barrasso (R-WY), Chuck Grassley (R-IA), Steve Daines (R-MT), Joni Ernst (R-IA), Bill Hagerty (R-TN), Jim Risch (R-ID), Roger Wicker (R-MS), Mike Crapo (R-ID), James Lankford (R-OK), Marsha Blackburn (R-TN), and Mike Braun (R-IN).
“This rule reaches well beyond the Department’s jurisdiction and attempts to regulate individuals’ choices for their own retirement savings.”
Rep. Virginia Foxx (R-NC)
The House companion is led by Rep. Rick Allen (R-GA) and supported by House Education and the Workforce Committee Chairwoman Virginia Foxx (R-NC).
“The Department of Labor’s fiduciary rule is government control and excessive regulatory burden at its worst. This rule reaches well beyond the Department’s jurisdiction and attempts to regulate individuals’ choices for their own retirement savings,” Foxx said.
Rep. Allen also issued a separate statement on his House CRA resolution to disapprove the Department of Labor retirement rule, along with releasing the resolution text. No bill number is yet available. The Senate resolution is S.J. Res. 79.
“Saving for retirement is crucial for American families, and sound financial advice when preparing for the future should be an easily accessible resource for hardworking Americans, not a bureaucratic nightmare. By muddying the waters with burdensome overregulation, the Biden DOL’s finalized fiduciary rule does more harm than good to the very people it is claiming to protect—retirees and savers,” Rep. Allen said. “If we do not act, this recycled Obama-era disaster will restrict access to valuable retirement guidance and impede prudent financial planning for millions of households. With the bicameral introduction of this Congressional Review Act resolution, we hope to safeguard Americans’ access to financial planning.”
Today’s resolutions drew an immediate statement of support from the Insured Retirement Institute, which has been fighting the DOL’s latest fiduciary rule effort since it was first introduced last August.
“The final rule creates significant hardships for today’s workers and retirees, making it much more expensive and complicated—and for many consumers, impossible—to access reliable professional guidance,” said Wayne Chopus, President and CEO of IRI. “That is why IRI supports the passage of a CRA resolution. Congress must disapprove the final rule to prevent the deepening of the retirement savings gap and the establishment of unnecessary barriers for workers to overcome as they seek a secure and dignified retirement.”
The new rule is currently set to take effect on September 23, 2024, with additional requirements kicking in one year later.
SEE ALSO:
• DOL Fiduciary Rule Hit with First Lawsuit
• Podcast: Fred Reish Unpacks the DOL’s New Fiduciary Rule
• Breaking Down the Basics: DOL Fiduciary Rule
• DOL Final Fiduciary Rule Released, Set to Become Effective in September