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March 4, 2015

Think Advisor: GOP Lawmakers: DOL Should Wait Its Turn on Fiduciary

“The Securities and Exchange Commission, not the Department of Labor, should lead the way on fiduciary rulemaking for BDs, two Republican lawmakers said in a letter Tuesday.

“The chairmen of the House and Senate Appropriations Subcommittees on Financial Services and General Government told Shaun Donovan, director of the Office of Management and Budget, in a Tuesday letter that the Department of Labor’s attempt to redefine fiduciary on retirement plans before the SEC decides how it will proceed will lead to “inconsistent and overlapping” regulatory requirements for brokers.

“The two lawmakers, Sen. John Boozman, R-Ark., and Rep. Ander Crenshaw, R-Fla., told Donovan that the SEC should “move first” in releasing a rulemaking as Section 913 of the Dodd-Frank Act “clearly designated the responsibility of developing a uniform fiduciary standard of care for broker-dealers and investment advisors” to the SEC. “Despite that fact, the DOL has moved forward to expand its own fiduciary standard” under the Employee Retirement Income Security Act.

“The OMB, part of the White House, is reviewing DOL’s proposed fiduciary redefinition.

“Rep. Ann Wagner, R-Mo., reintroduced her bill on Feb. 25 to require the DOL to wait to repropose its rule until the SEC issues its own fiduciary rulemaking.”

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“Given the “concerns raised” in DOL’s initial 2010 proposal, which DOL pulled, the lawmakers said that DOL should allow for a 90-day public comment period.”

“But Dennis Kelleher, president and CEO of Better Markets, told ThinkAdvisor in an email message Wednesday that Boozman and Crenshaw’s letter “is more of the same spin we’ve seen from industry trying desperately to prevent the proposed rule from being released to the public.”

“The letter includes “wild speculation about the rule” and “is baseless because no one has seen the rule yet. All DOL proposes to do is release the rule to the public for comment so that there can be an informed debate.””Added Kelleher: “Forcing the DOL to wait for the SEC to act is just a delaying tactic that will leave Americans trying to save for retirement victims of conflicts of interest for many more years. Public officials should be demanding that DOL release its rule immediately so that an informed, public debate can begin and the American people can see for themselves who is acting in their best interests.”

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Read the full Think Advisor article by Melanie Waddell here.

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