Congress Reacts to DOL Fiduciary Rule

Members of Congress are responding to the release of a U.S. Department of Labor (DOL) regulation that tightens conflict of interest rules under the Employee Retirement Income Security Act. Earlier this week, the U.S. House of Representatives Education and the Workforce Committee took action to block the rule.

The Big “I” supports numerous legislative measures that seek to address concerns about the rule. This week, Sens. Johnny Isakson (R-Georgia), Lamar Alexander (R-Tennessee) and Mike Enzi (R-Wyoming) joined Reps. Phil Roe (R-Tennessee), Charles Boustany (R-Louisiana) and Ann Wagner (R-Missouri) in introducing resolutions to block the DOL from implementing the rule under the Congressional Review Act.

The Act allows the U.S. Senate and House to vote on a joint resolution of disapproval to stop a federal agency from implementing a regulation without congressional authorization. Although the resolution only needs to pass with a simple majority in both the Senate and the House, it will likely be subject to a Presidential veto if it passes, and the two-thirds majority necessary to overcome a veto may be hard to reach. Thus far, the House resolution has been reported out of committee, but the Senate has not taken action.

Meanwhile, the DOL is beginning implementation of the new rule. The DOL has announced it will hold five seminars on the new rule between May and August, aiming to increase awareness and understanding about its impacts.

The dates and locations of the seminars, as well as links to register when available, include:

• Manchester, New Hampshire: May 19
• Birmingham, Alabama: June 16
• Milwaukee, Wisconsin: July 20
• Little Rock, Arkansas: August 2
• Newark, New Jersey: August 19

The new regulation requires any person who provides guidance to clients about certain retirement investments to adhere to a fiduciary standard of care. The rule primarily impacts IRAs, though it will also affect many 401(k) retirement plans and some HSAs. Moving forward, those who provide investment advice must either avoid compensation arrangements that create conflicts of interest or comply with the terms of an exemption the DOL issues.

Jennifer Webb is Big “I” federal government affairs counsel.