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By Sean Forbes
Oct. 27 — The House passed legislation that would derail the Department of Labor's fiduciary rulemaking legislation, but it's likely to run into a brick wall if it gets to the White House.
The Retail Investor Protection Act (H.R. 1090), passed by a nearly party-line vote of 245-186 on Oct. 27, is now headed to the Senate, but if it passes that chamber, President Barack Obama is likely to veto it. Only three Democrats voted in favor of the bill, and two Republicans opposed it.
The White House said Oct. 26 that if the president “were presented with H.R. 1090, his senior advisors would recommend that he veto the bill.”
H.R. 1090 would prevent the DOL from finalizing its rule (RIN 1210-AB32), also called the conflict-of-interest proposal, until the Securities and Exchange Commission completes its own work setting standards of conduct for brokers and dealers. The bill was introduced by Rep. Ann Wagner (R-Mo.) on the heels of Obama's green light to the DOL to send its proposal to the Office of Management and Budget.
An amendment to the bill, sponsored by Rep. Stephen F. Lynch (D-Mass.), that would have turned the legislation inside-out was defeated by a vote of 184-131, also largely along party lines. The amendment would have replaced the original language of the legislation with a requirement that the SEC revise its own regulations governing fiduciary duty no later than 60 days after the DOL finalizes its rule and coordinate its rulemaking with the DOL.
The DOL is expected to finalize its rule by summer 2016.
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Text of the legislation is at http://src.bna.com/MS.
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