The insurance industry is cautiously proceeding as if the Fiduciary Rule will in fact begin implementation on April 10, but the incoming Trump Administration and a Republican-controlled Congress could step in to delay implementation before April 10.
Rep. Joe Wilson (R-SC) introduced a bill on Jan. 6 – “Protecting American Families’ Retirement Advice Act” – that seeks to delay the DOL Rule’s effective date by 2 years. The legislation is thought to be a stall tactic giving Republicans time needed to initiate a full repeal of the rule.
“The Department of Labor’s fiduciary rule is one of the most costly, burdensome regulations to come from the Obama Administration. Rather than making retirement advice and financial stability more accessible for American families, they have disrupted the client-fiduciary relationship, increased costs, and limited access,” Wilson said in a statement about the bill. “This legislation will delay the implementation of this job-destroying rule, giving Congress and President-elect Donald Trump adequate time to re-evaluate this harmful regulation.”
Wilson, who famously interrupted a health care reform speech by President Obama in Sept. 2009 to a joint session of Congress by shouting, “You lie,” has served in the U.S. House since 2001.
National Association of Insurance and Financial Advisors (NAIFA) President Paul Dougherty applauded the proposed legislation in a letter to Rep. Wilson.
“NAIFA remains concerned that the final rule will reduce consumers’ access to honest, valuable information and advice from financial professionals about retirement products, such as 401(k)s, IRAs and annuities,” Dougherty said. “A delay provides time for the new administration to conduct a thoughtful and appropriate review and to work with stakeholders toward public policies that help Americans achieve their financial and retirement security.”
NAIFA CEO Kevin Mayeux, in a recent letter to association members, also expressed NAIFA’s commitment to addressing the DOL rule in the coming year.
“In spite of NAIFA’s efforts, which mitigated several of the draft rule’s troubling and unworkable restrictions, the final [DOL] rule still places undue burdens on advisors, companies and their clients,” Mayeux wrote. “NAIFA has teamed up with the ACLI to challenge the rule in court. We are pursuing opportunities to work with the new Congress and the Trump administration to reverse its harmful consequences and to put in place meaningful public policies to ensure the continuation of affordable access to financial guidance for individuals preparing for retirement.”
The Protecting American Families’ Retirement Advice Act is also supported by the following organizations:
• Dirk Kempthorne, President and CEO of the American Council of Life Insurers: “We thank Congressman Wilson for his leadership in introducing legislation acknowledging the need for immediate action to extend the April 10th compliance deadline of this rule.”
• Tim Pawlenty, CEO of the Financial Services Roundtable: “FSR strongly supports requiring companies to act in their customers ‘best interest.’ That’s just common sense. However, the current rule is overly complex, involves too much red tape, and is already negatively impacting consumer choice and service. Rep. Wilson’s bill will allow time for a less bureaucratic ‘best interest’ standard to be developed.”
• Cathy Weatherford, President and CEO of the Insured Retirement Institute: “We thank Congressman Wilson for his leadership on this important issue. We have long-standing concerns about the rule and its harmful impact on retirement savers. A delay is much needed and will provide more time to policymakers to reevaluate it and protect consumers from its negative consequences.”
• Kenneth E. Bentsen, Jr., President and CEO of SIFMA: “We continue to believe the rule is harmful to the market and most importantly investors. As our members have worked diligently to prepare for implementation, at great cost and with consequential impacts on retirement savers, a delay in applicability would be prudent to allow the new Congress and Administration to review a better course to protect investors.”
Do you think this proposed legislation will in fact derail DOL rule implementation? Sound off on this thread: DOL Rule could be on chopping block