The House Education and Workforce Committee has scheduled a vote this Wednesday on a Congressional Review Act to disapprove the Labor Department’s new fiduciary rule. The Insured Retirement Institute has criticized the rule as an “attempt to impose a one-size-fits-all fiduciary standard on virtually all financial professionals who sell retirement products.” The institute is urging committee members to approve the disapproval resolution. The Congressional Review Act allows Congress to overturn rules issued by a presidential administration through a joint resolution of disapproval.
For the resolution to take effect, it must pass the House and Senate and be signed by the president, or Congress must override a presidential veto. On June 26, the House Appropriations Subcommittee on Labor, Health and Human Services, Education, and related agencies introduced legislation preventing the Labor Department from using funds to administer, implement, or enforce its new fiduciary rule and related prohibited transaction exemptions. The House Appropriations Committee is scheduled to vote on this appropriations measure this Wednesday.
House committee to vote Wednesday.
Nine insurance trade groups have filed a lawsuit in the U.S. District Court for the Northern District of Texas to challenge the Labor Department’s new fiduciary rule. The groups argue that the department rushed to adopt the new retirement investment advice fiduciary definition regulations without meeting federal Administrative Procedure Act requirements and conducting an adequate cost-benefit analysis.
The Securities Industry and Financial Markets Association and the Financial Services Institute have joined the insurance groups’ suit. The Federation of Americans for Consumer Choice and several independent insurance agents have also filed in federal court, seeking to delay the implementation of the new fiduciary rule. They contend that the rule will cause significant harm if it goes into effect and have requested the court to delay its implementation until the existing case against Labor’s PTE 2020-02 on rollover advice is resolved.
The upcoming votes and legal challenges highlight the contentious nature of the Labor Department’s new fiduciary rule and its potential impact on financial professionals and consumers. Stakeholders closely monitor the developments as Congress and the courts deliberate on this pivotal issue.
