Saying the Biden Administration’s “overly restrictive” fiduciary rule put forth by the Department of Labor “will only complicate financial planning with burdensome overregulation,” authors of the Congressional Review Act Joint Resolution of Disapproval recently introduced in the House and Senate seeking overturn the rule, this week contributed an op-ed in the Washington Examiner explaining their rationale.
Rep. Rick Allen (R-GA) and Sen. Ted Budd (R-NC) co-authored the opinion article urging support for the CRA resolution to overturn the fiduciary rule. Both Rep. Allen and Sen. Budd are authors of CRA resolutions in their respective chamber of Congress.
The CRA enables Congress to disapprove of a final rule issued by a federal agency within 60 legislative days of its publication and prevents the agency from issuing a “substantially similar” rule in the future unless authorized by Congress, the op-ed states. “Our CRA resolution was advanced by the House Committee on Education and the Workforce last week, and we hope to see movement in the Senate in short order,” the congressmen wrote.
The op-ed rails against “Bidenomics” as destroying people’s budgets, and says the fiduciary rule will harm the very people it claims to protect—retirees and savers.
“This recycled Obama-era policy departs from previous, well-defined precedent on how a fiduciary provides financial advice and pivots to an ambiguous definition that could 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,” Allen and Budd write.
They go on to note that the 5th U.S. Circuit Court of Appeals invalidated a substantially similar rule in 2018, and cite statistics they say shows how the finalized rule could financially punish low- and middle-income individuals—and Black and Hispanic Americans in particular.
“This rule will strip working-class people of their options, hamper their retirement plans, and subject them to significant regulatory burdens and litigation risks,” the op-ed concludes. “With the bipartisan, bicameral introduction of our CRA resolution of disapproval, we aim to protect people’s access to financial planning and ensure a secure retirement.”
Rule opponents respond to DOL counter-filing in legal challenge
In additional fiduciary rule news of a back-and-forth variety, a coalition of nine insurance trade groups that originated a legal challenge to the fiduciary rule back in May responded July 12 to a brief filed June 28 by the DOL regarding the coalition’s request for a preliminary injunction to put the rule on hold while the litigation runs its course.
The DOL’s “opposition to plaintiffs’ motion for preliminary injunction” was filed to counter the lawsuit from the Federation of Americans for Consumer Choice aiming to halt the implementation of the fiduciary rule.
The FACC, which represents annuity and life insurance firms, a handful of insurance firms and independent agents, filed the preliminary injunction on May 21 in the U.S. District Court for the Eastern District of Texas. The suit argues that if applied, the new fiduciary rule would cause “dire consequences for tens of thousands of independent insurance agents and their clientele if not stopped.”
The FACC’s latest filing says the rule should be halted because the “DOL’s lead argument that ERISA’s text is broad and authorizes DOL to go beyond the common law—all but ignores [the 2018 Chamber decision], relying on the same authorities the Fifth Circuit considered in holding precisely the opposite when invalidating the 2016 rule.”
The ball is now in the Court’s court to make a decision on the injunction.
Read the coalition’s latest filing here.
SEE ALSO:
• 2 Efforts to Overturn DOL Fiduciary Rule Advance in Separate House Committee Votes
• Fiduciary Rule Fate Clouds in Wake of SCOTUS Chevron Doctrine Ruling
• Fiduciary Rule Update: Hearings, Lawsuits and Compliance Prep