The Senate approved a resolution of disapproval on Wednesday to block a rule proposed by the Department of Labor (DOL) to redefine the term “fiduciary” and to impose new restrictions on financial advisors.
U.S. Sens. Kelly Ayotte (R-NH), Pat Roberts (R-KS), Mike Rounds (R-SD) and Roger Wicker (R-MS) supported the resolution of disapproval, citing concerns that the proposed rule would restrict access to financial planners for low- and middle-income consumers.
“I am pleased my colleagues voted to block DOL from implementing this harmful rule,” Ayotte said. “This rule would have negatively impacted the ability of low and middle income Granite Staters to get financial advice to plan for their futures. It also would have restricted New Hampshire small businesses’ ability to provide financial products for their employees.”
The fiduciary rule was intended to protect consumers from misleading investment advice, but it is estimated to cost the financial industry $31.5 billion over the next 10 years and that up to five million Americans would lose access to annuities as a result of rising premiums.
“This rule will make it more difficult for low and middle-income families, the very people who they say this rule is intended to help, to save for retirement,” Roberts said. “It takes away the potential for millions of Americans to have a conversation with a knowledgeable and trusted professional on how to save for retirement and how to spend and re-invest when they reach that point in their life.”
Rounds said that he supported the resolution of disapproval because the rule would have had negative consequences for South Dakota families saving for retirement.
“By requiring financial advisors to become fiduciaries, this rule will limit the availability of retirement investment advice for millions of people, especially low-and-moderate-income Americans,” Rounds said. “The many regulations issued by the Obama administration consistently place undue financial burdens on already-overtaxed Americans, and the fiduciary rule is no different.”
Wicker called the proposed rule a “regulatory assault” that would make it nearly impossible for many to access retirement advice.
“Families rely on their financial advisors to plan for a secure retirement,” Wicker said. “This costly rule would give the federal government excessive control over who can access financial guidance. Americans with smaller retirement savings should not be at risk of losing access to affordable, quality advice.”
The Congressional Review Act enables the House of Representatives and Senate to use a joint resolution of disapproval to stop implementation of a federal rule or regulation without congressional authorization.
U.S. Reps. Charles Boustany (R-LA), Phil Roe (R-TN) and Ann Wagner (R-MO) led a resolution of disapproval to passage in the House last month.