WEEK IN REVIEW
Washington,
September 11, 2015 -
Lawmakers Express Bipartisan Concerns Over Labor Dept. Retirement Regulation
A controversial regulation proposed by the Department of Labor will make it harder for Americans, especially those with lower and middle incomes, to plan for retirement said Republicans, several Democrats and witnesses at a joint subcommittee hearing on Thursday.
The Capital Markets and Government Sponsored Enterprises Subcommittee and the Oversight and Investigations Subcommittee held the hearing to examine the Labor Department's proposed "fiduciary rule," which will limit retirement choices and prevent lower and middle income savers from accessing affordable financial advice.
"Every day, millions of Americans look to a broker dealer or investment adviser for guidance on what to do with their hard-earned savings and to help them achieve a secure and prosperous retirement. That makes it all the more curious that this same Department of Labor is now marching forward with a regulation that will upend the ability of Americans to receive such guidance and which threatens the retirement security of the most vulnerable within our society," said Capital Markets Subcommittee Chairman Scott Garrett (R-NJ).
Rep. Sean Duffy (R-WI), Chairman of the Oversight and Investigations Subcommittee, noted the proposed rulemaking has been described as "Obamacare for your IRA, and is yet another attempt by the Administration to perpetuate a 'government-knows-best' regime. Americans should be able to make the investment choice that is right for them."
Expert witnesses at the hearing said the regulation will make the type of financial advice millions of Americans want either unaffordable or unavailable -- particularly for those who need it most. "Under such a model, many will either pay more than they do today or will receive no advice at all," said one witness.
"There will be massive market disruption and many middle income savers will suffer without advice," said another witness.
Rep. Ann Wagner (R-MO) has introduced H.R. 1090, which would stop the Department of Labor’s misguided rule. "This is good legislation that prevents an overzealous administration from taking away sound advice for low and middle income savers," she told reporters during an interview this week.
Following the hearing, Chairman Jeb Hensarling (R-TX) said the Committee will advance Rep. Wagner's bill. "We will stand with lower and middle income savers and prevent government bureaucrats from denying them access to reliable and affordable retirement saving options," he said.
Task Force Reviews U.S. Efforts to Combat Terror Financing
The Task Force to Investigate Terrorism Financing held its fifth hearing since April on Wednesday to assess whether the United States is doing enough to stem the flow of funds to terrorist organizations.
"While the United States has significant tools at its disposal to degrade and inhibit terrorist financing and money laundering, it is unclear to what extent such tools have been effectively utilized," said Task Force Chairman Rep. Michael Fitzpatrick (R-PA) in his opening statement, "Today’s hearing will examine the current state of counter-terrorist financing efforts within the federal government to ensure that they are meeting each’s intended purpose and, should they not be, identify areas needing improvement."
Task Force members continued their discussions from previous hearings about the myriad ways terrorist organizations are able to finance their operations and the threat these groups pose to U.S. national security.
Concerns were expressed by both Republicans and Democrats on the Task Force that President Obama's nuclear deal with Iran will lead to more terrorism since Iran is the world's largest and most dangerous state sponsor of terrorism.
Task Force Vice Chairman Robert Pittenger (R-NC) said, “Iran will soon receive a windfall of over $100 billion, and their 46 banks will be integrated into the world’s financial system. Preventing these dollars from funding terror must be a priority."
Witness Scott Modell told the Task Force that the U.S. "will fall further behind" when it comes to combating terrorist financing if the Iranian nuclear agreement is implemented. "If you look at the thousands of individuals and entities that have been designated as a result of Iran's illicit activities over the years that are now going to be exonerated essentially by this deal, of course it's a setback. Those are people who are willingly engaged in criminal activity on behalf of the Iranian regime."
MEMBER SPOTLIGHT
Rep. Sean Duffy | Duffy: Financial reforms have failed us
In large part, the 2008 financial crisis was a result of federal financial regulators failing to do their jobs in the first place, coupled with a failure to anticipate the looming issues in the subprime mortgage market. What did Dodd-Frank do? It rewarded regulators’ incompetence with more responsibility, and it built a moat around “too big to fail institutions,” while making it difficult for small banks to stay afloat — to say nothing of the untold damage it has done to our economy. The law of unintended consequences has never been more apparent than when we look at Dodd-Frank.
Weekend Must Reads
Real Clear Politics | Can We Please Have a Rules-Based Policy?
And so much of the confusion stems from the fact that the Fed is still running a seat-of-the-pants policy based on the vagaries of monthly data points and daily stock market moves when it should adhere to a market price rule (commodity indexes including gold, the exchange value of the dollar, and Treasury bond spreads) that might really inform investors and govern Fed activity.
Wall Street Journal | At 50, This Housing Policy Needs a Big Renovation
As HUD marks its 50-year anniversary on Sept. 9, the challenges it faces are not on city streets or in homeless shelters, but within its own offices. Mission creep, management problems and criminal activity have rendered the agency a feeble instrument for renewing urban America.
AEI | No, America Isn’t Moving Left
The real defect in the theory that America is moving left is that the polling evidence does not back it up. The public has not turned to the left ideologically—and it remains unhappy with the status quo under Obama.
Forbes | Addressing the SEC's Administrative "Home Court" Advantage in Enforcement Proceedings
To date, the SEC has been silent on the central issue of the fairness of administrative proceedings and the objectivity of the ALJs, despite the fact that courts have noted it would be a relatively “easy fix” for the SEC to change the way it appoints judges.
On the Horizon
September 17, 2015 10:00 a.m.
Full Committee Hearing
"The Dodd-Frank Act Five Years Later: Are We More Free?"
September 17, 2015 2:00 p.m.
Monetary Policy and Trade Subcommittee Hearing
"Strengthening U.S. Leadership in a Turbulent Global Economy"
In the News
Politico Pro | Iran the focus of terror finance task force hearing
Bloomberg | Lawmakers Seek Magic Number for Deal on SIFI Label Level
Reuters | U.S. outlines new policy for investigating corporate executives
St. Louis Post-Dispatch | Wagner Bill Heats Up Financial Services Fight
Washington Examiner | House Panel Will Move to Stop Labor Rule
New York Times | Companies Struggle With Rules on Conflict Minerals
Austin American-Statesman | Williams: Why I Will Oppose the Iran Deal
MPBN News | Bruce Poliquin Critical of Investment Advisor Regulations
Benefits Pro | Several Democrats Concerned Over DOL Fiduciary Rule
Think Advisor | Rep. Wagner Wants Bill to Halt DOL Fiduciary Rule Marked Up by Month-End
Plan Adviser | Legislators Hear Arguments About Fiduciary Reform
Kuwait News Agency | Kuwait’s Cooperation on Detecting Terrorism Financing “Impressive”
