Democratic and Republican lawmakers criticized the Department of Labor’s fiduciary rule Tuesday, saying they’d use every tool at their disposal to defeat the measure.
Representatives French Hill (R-Ark.) and David Scott (D-Ga.) told attendees of SIFMA’s annual conference that both the DOL and the Obama administration, with its support of the rule, have the wrong approach to fiduciary rulemaking.
“They’re not wrong on the issues out there, but they’re wrong because of the unintended consequences,” Scott said. While Scott supports President Obama, he believes the president is “getting some bad advice” on the fiduciary rule.
Both Hill and Scott believe the Securities and Exchange Commission is the proper authority to lead any rulemaking on a fiduciary standard to regulate financial advisors. Scott said the DOL was trying to “squeeze in the back door.”
The SEC was “not doing what it’s supposed to be doing,” Scott said, and that chair Mary Jo White hasn’t been aggressive in this area. ”I won’t say whether she’s competent or not.”
To halt the Labor Department efforts, both Hill and Scott said they would support using riders on appropriations bills to stop funding toward the initiative.
“I think we would both argue it would remain in the omnibus bill for December 11,” Hill said, adding that he doesn’t think leadership has made a decision on when to vote on the appropriations, although it could be as early as next week.
Scott also signed a recent letter from Democrats to Labor Secretary Tom Perez urging the agency to reopen a public comment period after a final version of the rule is published next year. “The people of this country deserve better than the haphazard way we’re going about it. I want a best interest standard, but I don’t want to punish the very people who need that help,” Scott said.
In addition to delaying the implementation of the DOL’s fiduciary rule, Hill and French supported the passage of H.R. 1090. The bill, introduced by Ann Wagner (R-Mo.), would prohibit the DOL from moving forward with its fiduciary rulemaking before the SEC had implemented its own rule.
“The bill that is moving, 1090, could put the issue back where it belongs,” Scott said. The legislation has not seen any support in the Senate, although that could change. Hill said the Senate has discussed introducing a parallel bill. President Obama has said he would veto any such legislation that came before him.
“I’m fine with the idea of a best interest standard or a fiduciary standard, but there’s a right way and wrong way to do it. And in my view, sadly, the administration keeps dogmatically pursuing the wrong direction on that,” Hill said.
