The U.S. House of Representatives today will vote on a spending bill that contains key amendments restricting funding for the Department of Labor’s (DOL) recently proposed fiduciary rule.
H.R. 5894, or otherwise known as the Labor, Health and Human Services, Education, and Related Agencies Appropriations Act, is sponsored by Rep. Robert Aderholt (R-AL), and contains three amendments made by Republican state representatives that would deter funding to the Biden Administration’s latest proposal.
The first amendment, created by Rep. Rick Allen (R-GA), would restrict any funds made available by the legislation to be used to finalize, implement, or enforce the proposed rule or any substantially similar rule.
Another amendment by Rep. Ann Wagner (R-MO) prohibits the DOL from using funds to finalize, implement, or enforce proposed amendments to class prohibited transaction exemptions (PTEs) available to investment advice fiduciaries.
The last amendment, introduced by Rep. Ralph Norman (R-SC), would prohibit funding to carry out the actions described in the fact sheet released by the White House, which included a proposal to crack down on “junk fees” in retirement investment advice.
The House is expected to make its first votes starting at 10:30 a.m. ET, and will conclude last votes at 4:20 p.m. ET.
The DOL proposed the retirement security rule on October 31, following weeks of speculation and even calls from GOP lawmakers to halt further action on the proposal.
Under the new proposal, investment advisors would have to “adhere to high standards of care and loyalty when they make investment recommendations and avoid recommendations that favor their financial and other interests at the expense of retirement savers,” according to the DOL and the Biden Administration.
Furthermore, the updated definition of an investment advice fiduciary would apply when financial services providers give investment advice for a fee to retirement plan participants, individual retirement account owners and others.
It’s a proposal that the government says would further suppress “junk fees,” but one that the insurance industry contends would deter legitimate compensation from advisors.
The DOL has since opened its commentary period on the 500-page proposal, but industry trade groups are advocating for further extensions. Under the current 60-day period, advocates and critics have until January 2, 2024, to write comments on the proposal.
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