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Left Turns

The Silent Treatment

For months, the Department of Labor has been working behind closed doors on a regulatory proposal that will make it harder for low- and middle-income families to save for retirement. And for months, bipartisan concerns regarding the department’s “fiduciary” proposal have fallen on deaf ears.
Most recently, nine House Democrats wrote to the Office of Management and Budget (OMB)—where the rule is currently under review—about the proposal. As The Hill reported, the letter shows some Democrats “still harbor concerns about the effort.” Nearly 100 House Democrats raised these concerns in a September letter to Labor Secretary Thomas Perez, writing:

[W]e continue to hear from constituents, academics, providers, and investors that there are specific provisions of the Rule that may cause market disruptions and limit the ability of segments of the market to reasonably access advice … it is vital that the proposal doesn’t limit consumer choice and access to advice, have a disproportionate impact on lower- or middle-income communities, or raise the costs of saving for retirement.

Senate Democrats have also sent letters to the department that “slammed President Obama’s proposal to regulate financial advisers.” Still, department officials have remained silent on what changes—if any—they’ve made to address these and other bipartisan concerns.
The uncertainty has even led one lawmaker, Rep. Jared Polis (D-CO), to make a highly unusual request to privately review the rule before it is made final. In a letter to administration officials, Rep. Polis wrote:

Due to the importance of this Rule to our economy, to workers and to retirees, as ranking member on the Health, Employment, Labor, and Pensions Subcommittee I respectfully request a private and secure viewing of the Rule that was submitted by the Department of Labor to OMB.

To make matters worse, a recent report from the Senate governmental affairs committee raises concerns with how the rule was developed, noting the department “frequently prioritized the expeditious completion of the rulemaking process at the expense of thoughtful deliberation.”
Creating rules behind closed doors. Failing to respond to bipartisan concerns. Rushing to regulate at the expense of good policy. This is not the fair and open process Americans deserve.
That’s why Republicans and Democrats in the House have developed a responsible legislative alternative that will strengthen the retirement security of low- and middle-income families. The Affordable Retirement Advice Protection Act (H.R. 4293), introduced by Rep. Phil Roe (R-TN), and the Strengthening Access to Valuable Education and Retirement Support Act (H.R. 4294), introduced by Rep. Peter Roskam (R-IL) will:

  • Raise the bar for the retirement services industry by requiring advisors to serve in their clients’ best interests;
  • Require advisors to clearly communicate key information to ensure investors are well-informed to make investment choices; and
  • Ensure that individuals and families saving for retirement have access to advice and investment options to meet their individual needs and circumstances.

Rep. Roe has been leading this effort, and here is how he recently described the complementary, bipartisan bills:

These proposals will strengthen retirement planning by requiring financial advisors to look out for their clients’ best interests. They will enhance transparency and accountability with several clear, simple, and relevant disclosure requirements. And they will protect access to high-quality, affordable retirement advice for all workers, retirees, and small business owners.

As Congress advances positive solutions in an open and transparent way, what can working families and retirees expect from the department? If history is any indicator—the department won’t say.

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