FOR IMMEDIATE RELEASE
Wednesday, September 2, 2020
Contact: Pamela Russell at 202-618-6433 or prussell@bettermarkets.com
Washington, D.C. – Stephen W. Hall, Legal Director and Securities Specialist for Better Markets, issued the following statement on the eve of tomorrow’s hearing set by the Department of Labor (“DOL”) on its proposed rule that will allow financial advisers to continue siphoning away hard-earned savings from Americans’ retirement accounts:
“The DOL’s hearing is nothing more than a sham, intended to create the false impression that the agency is engaged in a fair and open rulemaking and actually cares about outside points of view. In fact, everything about this rulemaking shows that it was a pre-determined, pro-industry betrayal of millions of American retirement savers.
“Workers and retirees continue to lose billions of dollars a year in hard-earned savings to financial advisers who steer their clients into overpriced and underperforming investments to line their own pockets. As we argued in our comment letter, the proposed rule will do almost nothing to protect retirement savers from those abuses. While the DOL claims its new proposal is a “best interest” or fiduciary duty rule, it’s nothing of the sort. It restores huge loopholes in the statutory protections intended for retirement savers, and for any investment advice that’s still covered, it adopts weak conditions that will allow harmful conflicts of interest to continue flourishing.
“The entire rulemaking process has been thoroughly contaminated from the beginning, and tomorrow’s hearing is just a predictable step in the process. The DOL provided only eight working days’ notice of the hearing and imposed strict limits on the witnesses who would be allowed to testify and also on the content of their testimony. It confined the witnesses to those who had previously requested a hearing during the comment period; it limited testimony to purely factual matters, banning any testimony on the critical legal issues presented; and it required anyone asking to testify to demonstrate that his or her views could not have been submitted in writing. The entire process has been designed to discourage participation and limit any public airing of views on the DOL’s deeply flawed proposal.
“This latest maneuver by the DOL follows a rulemaking process that has been rushed, unfair and unethical. The DOL took the almost unheard-of step of allowing only 30 days for public comment on a complex rule that will affect virtually every American and which has been the subject of intense debate for over a decade. And the agency refused to extend the comment period notwithstanding numerous requests from interested parties. In addition, the DOL provided no notice and opportunity for comment whatsoever on a related rule that re-opened huge loopholes in the protections against conflicts of interest that Americans are supposed to receive under the law. Adding insult to injury, the DOL gave Secretary Scalia a free “ethics” pass to preside over these rules. That was outrageous, since Secretary Scalia, when serving in private practice, spearheaded the legal attack that killed a very strong fiduciary duty rule issued by the Obama Administration in 2016.
“In this rule, rather than protecting retirees and those saving for retirement, the DOL is protecting the profits of the financial services industry. That is a terrible abdication of responsibility by the DOL, which is supposed to look after the best interests of the tens of millions of Americans who are struggling to save some of their hard-earned money for a decent retirement. This sham of a hearing, along with the entire process, is nothing more than an attempt to conceal the DOL’s betrayal of American workers and retirees.”
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Better Markets is a non-profit, non-partisan, and independent organization founded in the wake of the 2008 financial crisis to promote the public interest in the financial markets, support the financial reform of Wall Street and make our financial system work for all Americans again. Better Markets works with allies – including many in finance – to promote pro-market, pro-business and pro-growth policies that help build a stronger, safer financial system that protects and promotes Americans’ jobs, savings, retirements and more. To learn more, visit www.bettermarkets.com.
