Republicans Move to Block Fiduciary Rule

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By Chris Opfer

April 18 — A group of Senate Republicans introduced a resolution to stop the Labor Department's new conflict-of-interest rule for retirement brokers.

The resolution (S.J.Res.33) introduced April 18 and sponsored by Sen. Johnny Isakson (R-Ga.) seeks to pump the brakes on the rule via the Congressional Review Act. The CRA allows Congress to block new regulations through a joint resolution of disapproval passed by both chambers, which is subject to presidential veto.

The fiduciary rule, which the DOL published earlier this month, extends the Employee Retirement Income Security Act's fiduciary rules to brokers handling workers' retirement savings (67 PBD, 4/7/16). Although the Labor Department scaled down the final version of the rule in response to concerns from the financial services community and lawmakers on both sides of the aisle, some opponents say they're still concerned about the cost of compliance and whether it will price out low-income workers from retirement savings advice.

The disapproval resolution comes three days after House Republicans introduced a CRA challenge to the Labor Department's “persuader” rule. Opponents are also considering stand-alone legislation and a possible government funding rider to block the fiduciary rule from taking effect.

The Office of Management and Budget has determined that the conflict-of-interest restrictions (RIN 1210-AB32) qualify as a “major rule” because they are likely to have an annual impact on the economy of $100 million or more. The CRA automatically delays major rules for 60 days, and extends the timeout period another 30 legislative days in the event that the president vetoes a disapproval resolution.

President Barack Obama is expected to veto the resolution if it passes both chambers and lands on his desk for his signature. The Labor Department is slated to begin implementing the rule on a phased-in basis in April 2017.

To contact the reporter on this story: Chris Opfer in Washington at copfer@bna.com

To contact the editor responsible for this story: Susan J. McGolrick at smcgolrick@bna.com

For More Information

Text of the resolution is available at http://src.bna.com/edk.