Financial advice industry groups and consumer advocacy groups should help the Department of Labor finalize its fiduciary rule, a group of House Democrats said in a letter they were preparing just ahead of the DOL's comment deadline on the proposal.

With the comment period on the proposed fiduciary rule (RIN 1210–AB32)—also called the conflict-of-interest rule—closing Sept. 24, the Democrats said in a letter they will send to DOL Secretary Thomas E. Perez that the DOL should “consider options for convening a small working group of industry professionals and consumer advocates to aid with the finalization of the Rule as to further ease any final implementation issues.”

But allowing such groups to have a say in the rule's final language may run afoul of how such a regulation is to be finalized, David Certner, legislative counsel and legislative policy director for government affairs at AARP in Washington, told Bloomberg BNA.

“I question whether that is fully consistent” with the Administrative Procedure Act—“it instead sounds more like a negotiated rulemaking, which this is not,” Certner said in a Sept. 22 e-mail. There have been two comment periods, a four-day hearing “and numerous meetings of industry and consumer reps with DoL staff—in short, there has been ample opportunity for comment and input,” he said.

A final rule is expected by early to mid-2016.

Democrats were still gathering signatures Sept. 22 as they prepared to send the letter, text of which Bloomberg BNA obtained from Eric Harris, press secretary for Rep. Gwen Moore (D-Wis.), a member of the House Financial Services Committee and one of those signing the letter. It had the signatures of 88 House Democrats, and will “most likely have 90” by close of business Sept. 22, Harris said.

A DOL spokesman said Sept. 22 that while the department had yet “to receive any formal letter, we couldn't agree more with Rep. Gwen Moore's recent statement that through our ongoing and constructive dialogue, ‘Together, we're getting to a better place with the rule.’ Members of Congress understand how important it is to ensure their constituents are receiving retirement investment advice that is in their best interest. Congressional letters such as this are an important part of every notice and comment rulemaking.”

Congressional Opposition

The letter is another sign that many Democrats are siding with their Republican colleagues in opposition to the DOL's rulemaking, although they are taking a less confrontational approach.

Immediately after President Barack Obama in February directed the DOL to send its proposal to the Office of Management and Budget, Rep. Ann Wagner (R-Mo.) introduced a bill (H.R. 1090) that would force the DOL to a stop its efforts until the Securities and Exchange Commission issues a final rule relating to standards of conduct for brokers and dealers. The bill currently has 19 co-sponsors, all Republicans. However, if history is an indicator of the future, the president is likely to veto the bill if it hits his desk, because he promised to veto Wagner's similarly worded bill introduced in 2013.

In June, the House Appropriations Committee approved by a vote of 30-21 legislation that would cut DOL spending and block a number of related initiatives, including the proposed conflict-of-interest rule. A day later, the Senate Appropriations Committee approved on a party-line 16-14 vote spending legislation that would also block the rule.

Excerpted from a story that ran in Pension & Benefits Daily (09/23/2015).

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