This week, two companion bills—which would prohibit the Department of Labor (DOL) from finalizing a proposed rule to amend the current ERISA definition of investment advice fiduciary without congressional approval—made strides in the U.S. House of Representatives. Both are now pending consideration by the full House.

On Tuesday, the House Education and the Workforce Committee approved H.R. 4294, the “Strengthening Access to Valuable Education and Retirement Support Act,” spearheaded by Rep. Peter Roskam (R-Illinois), and H.R. 4293, the “Affordable Retirement Advice Protection Act,” led by Rep. Phil Roe (R-Tennessee). On Wednesday, the Committee on Ways and Means also approved H.R. 4294.

Currently, the Office of Management and Budget (OMB) is reviewing the proposed DOL rule. The OMB’s review is the last hurdle before public release of a final rule, which is anticipated sometime in March or April. The final rule is expected to take effect before the end of the year, assuming no congressional action or legal challenge.

Since the DOL first proposed the rule in April 2015, the Big “I” has sounded the alarm. While well intentioned, the proposed rule could lead to investor harm and limit consumer access to professional advice. The rule will impose a wide range of new administrative requirements that would likely be too costly to implement for many small and midsized independent broker-dealers, who almost exclusively service middle-income Americans. Through the imposition of these requirements on advisors who are paid on a commission basis, the proposal implicitly favors a fee-for-service model that does not work for most Americans of modest means.

Both bills approved earlier this week would prohibit the DOL from amending the current fiduciary investment advice definition without congressional approval. Both would also establish a “best interest” standard for investment advice and would adopt elements of the current DOL proposal, but with a number of necessary modifications. Each also allows advisors to sell proprietary products, as long as they disclose that activity to clients.

Last year, Rep. Ann Wagner (R-Missouri), introduced H.R. 1090, the “Retail Investor Protection Act,” and Reps. Mike Kelley (R-Pennsylvania) and Sam Johnson (R-Texas) introduced H.R. 3922, the “Retirement Choice Protection Act.” Both would address concerns over the DOL proposal, though neither measure has gained much momentum due to a lack of bipartisan support.

Despite the recent committee hearings and strong support in the House for a solution to the potential problems that the DOL rule will create, the U.S. Senate has yet to introduce similar efforts, and any bill that passes will likely face a presidential veto. 

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