Bill to Block Fiduciary Rule Passes Out of Committee

[DHK]

The Hill By Tim Devaney -
04/21/16 10:29 AM EDT

Congressional Republicans are racing to block the Obama administration's so-called fiduciary rule that requires retirement advisers to act in the best interest of their clients.

A Republican-backed measure that would overturn the fiduciary rule cleared a key House panel Thursday.

The House Education and Workforce Committee voted 22-14 to pass a motion of disapproval under the Congressional Review Act, which allows lawmakers to collectively roll back regulations after they have been finalized.

The disapproval measure will now go to the House floor for a final vote next week, according to Majority Leader Kevin McCarthy (R-Calif.).

Republicans say the rule would make retirement investment advice more expensive for middle- and low-income Americans. But Democrats contend it would bring transparency to the process and protect retirees from bad advice.

"Wealthy Americans can afford to pay for this level of financial assistance," House Education and Workforce Committee Chairman John Kline (R-Minn.) said at the hearing. "Low- and middle-income families, on the other hand, cannot."

"We will not support a regulatory regime that restricts access to affordable financial advice and makes it harder for families to save for retirement," he added.

Rep. Bobby Scott (D-Va.) denounced the bill as "an effort to allow some brokers to continue to put their own interests ahead of the interests of their clients."

"It seems that some investment advisers are concerned that their business model won't work if they're not allowed to cheat people out of their hard-earned retirement savings," he said Thursday at the hearing.

The Senate is also considering a motion of disapproval against the fiduciary rule.

If Republicans can muster enough support to pass the disapproval measures in both chambers of Congress, it's unlikely they will have enough votes on their own to overcome a veto from President Obama.

Originally sent to me via Americans for Annuity Protection, but here's the link:

House panel votes to overturn Obama's financial adviser rule | TheHill

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Here's the homepage for Americans for Annuity Protection: Americans for Annuity Protection

 

[Gulfman]

Glad someone is trying to defeat this laydown.


Bunch of non-sense. Fiduciary is just another word for liability. Another loophole for lawyers to sue. Lawyers wrote this bill, and its in THEIR INTEREST (only) to make sure it sticks.


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[DHK]

American Equity: DOL Rule Threatens Independent Annuity Agents - InsuranceNewsNet

The CEO of a top fixed indexed annuity (FIA) carrier on Thursday raised serious questions about the viability of supervising independent insurance agents involved in the sale of FIAs under the Department of Labor’s fiduciary rule.

The liability associated with the rule’s Best Interest Contract (BIC) could cause carriers to pivot away from independent insurance agents and toward broker-dealers and banks instead, said John Matovina, president and CEO of American Equity Investment Life Holding.

In the independent agent channel, supervisory financial institutions such as insurance companies risk legal exposures that “we’re very likely not interested in,” Matovina said during the company’s first-quarter earnings call Thursday.

With the bank and broker-dealer channel, insurance carriers serve as a product manufacturer only and the banks and broker-dealers take on the institutional supervisory responsibilities on behalf of individual agents.

And we were originally concerned with agent liability and E&O premiums increasing.

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Of course, this is the other possibility:

Sweetening Fixed Annuities
Barring any changes to the rule, Matovina said American Equity could not envision offering simpler FIAs with a lower commission structure through the independent distribution channel as the supervisory risk for the carrier is too high.

“Right now we think the risk is too great,” he said.

If the final rule stands, American Equity would look to mitigate the disruption to FIA sales by updating and expanding the company’s menu of “traditional declared rate annuities” that offer lifetime income riders and other features, Matovina said.

Traditional fixed annuities will be sold into retirement accounts under the less burdensome Prohibited Transaction Exemption 84-24.

 

[xrac]

Glad someone is trying to defeat this laydown.


Bunch of non-sense. Fiduciary is just another word for liability. Another loophole for lawyers to sue. Lawyers wrote this bill, and its in THEIR INTEREST (only) to make sure it sticks.


.

I agree. The ruling will only generate paper, enforcement, and lawsuits but the consumer will only be worse off.

 

[Gulfman]

American Equity: DOL Rule Threatens Independent Annuity Agents - InsuranceNewsNet

And we were originally concerned with agent liability and E&O premiums increasing.

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Of course, this is the other possibility:

Those chicken ***** whores....!

He basically said IOW "we dont have the balls to sell this product ourselves....and we have a problem w. Agents selling it. We'd prefer that banks and large brokerage houses sell this and stick ""their necks out"" rather than ours!!!"

I would shun these guys. I bet you they'd roll over on you like a cheap hooker.

 

[Golfnut2112]

Those chicken ***** whores....!

He basically said IOW "we dont have the balls to sell this product ourselves....and we have a problem w. Agents selling it. We'd prefer that banks and large brokerage houses sell this and stick ""their necks out"" rather than ours!!!"

I would shun these guys. I bet you they'd roll over on you like a cheap hooker.

It's not so much as having balls but having common sense. You cannot still make the product available to independent agents when annuities are all they can recommend. If you are an independent get your license and a broker dealer then run it thru them.

 

[Gulfman]

It's not so much as having balls but having common sense. You cannot still make the product available to independent agents when annuities are all they can recommend. If you are an independent get your license and a broker dealer then run it thru them.

What lic. are you talking about specifically?

Series 6, 65, etc?

Common sense? Yes..this is exactly what it is, because fixed indexed annuities are not recognized as a security. If they make them a security, that would be another story, but they are not.

It sounds like WAR. The War between who gets what and why. The lobby for bankers and security brokers is much stronger than the insurance lobby. At this pace, a regular annuity will be considered a security. It will be MORE REGULATION, more gov.fees, less comm., less distribution and less sales made for "everyone" (including brokers).




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[DHK]

http://www.benefitspro.com/2016/04/28/house-passes-resolution-against-dol-rule?ref=hp-top-stories

House Passes Resolution Against DOL Rule

The U.S. House of Representatives passed a resolution of disapproval of the Department of Labor’s fiduciary rule today by a 234 to 183 vote.

The vote was almost entirely along party lines—one Republican voted nay.

Today’s vote suggests Republican opponents of DOL’s rule will unlikely be able to garner enough support to override a presidential veto—290 votes would be required in the House, assuming all 435 members vote. A two-thirds majority in the Senate would also be required to kill DOL’s rule.

Notwithstanding the uphill battle, industry interest groups remain galvanized against the rule, even as more of their constituents are rolling out product adjustments to assure compliance.

The U.S. Chamber of Commerce and the Financial Services Institute were among eight industry group signatories to a letter to lawmakers urging their support for the disapproval resolution.

 

[DHK]

Senate joins House in effort to deny DOL fiduciary funding

The Senate joined the House on Tuesday in trying to shut down a rule proposed by the Department of Labor to raise investment advice standards for retirement accounts.

A Senate Appropriations subcommittee approved a bill that included language to deny DOL funding to finalize and implement the fiduciary rule.

The provision is part of a $153.2 billion measure that would fund DOL, the Department of Health and Human Services, the Department of Education and several other agencies for fiscal-year 2016.


Both the Senate and House spending bills for the agencies include a so-called rider to defund the DOL rule. The full House Appropriations Committee is scheduled to vote on its version on Wednesday. The Senate bill will now head to the full appropriations panel in that chamber.

Secretary of Labor Thomas Perez indicated the agency would forge ahead with the fiduciary rule despite resistance from Capitol Hill.

“Every year in the appropriations cycle we deal with this same process, and we will continue to fight for what's best for American consumers,” Mr. Perez told reporters on the sidelines of a conference at the Brookings Institution in Washington on Tuesday.

Mr. Perez is a veteran of battles against appropriations riders.

“There was an effort last year to do the same,” Mr. Perez said. “It was not successful.”

But unlike last year, when Democrats had the leverage of a Senate majority to stop the fiduciary defunding rider, Republicans now control both the House and Senate.

In a speech at an event sponsored by the Hamilton Project at Brookings, Mr. Perez said that finalizing the rule in the remaining 577 days of the Obama administration was “at or near the top of the list of the things we need to do to strengthen the middle class.”

In talking to reporters, Mr. Perez added: “We're making real progress toward producing a final rule that will be … a win for consumers, a win for [advisory] businesses that want a level playing field and a win for retirees.”

The rule is designed to reduce conflicts of interest for brokers working with 401(k) plans and individual retirement accounts by preventing them from inappropriately putting investors into high-fee products that eat away at their retirement savings.

It was introduced in April with strong White House backing. The comment period ends July 21.

Republicans and financial industry critics say the rule would foist significant liability risks and regulatory costs on brokers and potentially force them to abandon investors with modest balances in their retirement accounts.

The Financial Planning Association supports the rule and will talk to lawmakers Wednesday about defeating the rider during its Advocacy Day on Capitol Hill. About 60 FPA members will meet with 23 members of Congress.

“I am hopeful [the rider] will be stripped from the final appropriations bill,” said Karen L. Nystrom, the director of advocacy at the FPA.

Even though the congressional committees are voting in favor of the bills, she said that the rider can still be stopped.

“There's a lot of things going on behind the scenes and a lot of maneuvering that I'm not privy to,” Ms. Nystrom said.

 

[Brian F 11]

Glad someone is trying to defeat this laydown. Bunch of non-sense. Fiduciary is just another word for liability. Another loophole for lawyers to sue. Lawyers wrote this bill, and its in THEIR INTEREST (only) to make sure it sticks. .

Politicians ARE lawyers. Almost very law passed is in their favor, or in the favor of big business, not the consumer. That is why things are as bad as they are.

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