Senator Christopher Dodd plans to introduce his financial regulatory reform bill Monday without Republican support. He’s still hopeful that negotiations with Senator Bob Corker (R.-Tenn.) will succeed, however, he said in a statement Thursday morning. Previous negotiations with Senator Richard Shelby (R.- Ga.) fell apart last month.
One of the biggest sticking points in the bill was whether a Consumer Protection Agency would be independent, and where it would be housed.
Whether a fiduciary standard would be extended to registered reps (Series 7 holders) is also up in the air. Two competing amendments on the issue have lately been floated.
Senator Tim Johnson (R- S.D.), incoming Senate Banking Committee Chair, created an amendment in mid-February that would eliminate from Senate regulatory reform legislation the application of a fiduciary standard to investment advice provided by brokers. Instead, Johnson’s amendment calls for an 18-month SEC study on the fiduciary issue.
Then last week, Senate Banking Committee member Herb Kohl (D-Wis.) began circulating an amendment that would require brokers, RIAs and advisors who provide financial planning advice to be regulated by a new agency called the Financial Planning Oversight Board that would support adherence to the fiduciary standard.
Those governed by the new body would include any financial advisor or registered rep who performed at least two financial planning functions, including investment planning, tax planning, education planning, retirement planning, estate planning or risk management.
The idea was hatched by the Financial Planning Coalition, a group comprised of the Financial Planning Association, NAPFA (the National Association of Personal Financial Advisors) and the Certified Planner Board of Standards, which monitors the CFP standard.
Dodd released this statement Thursday morning:
“On Monday, I will present to my colleagues a substitute to the original financial reform package, unveiled last November.
“Over the last few months, Banking Committee members have worked together to try and produce a consensus package. Together we have made significant progress and resolved a many of the items, but a few outstanding issues remain.
“It has always been my goal to produce a consensus package. And we have reached a point where bringing the bill to the full committee is the best course of action to achieve that end. I plan to hold a full committee markup the week of March 22nd.
“I have been fortunate to have a strong partner in Senator Corker, and my new proposal will reflect his input and the good work done by many of our colleagues as well.”
“Our talks will continue, and it is still our hope to come to agreement on a strong bill all of the Senate can be proud to support very soon.”