In remarks on the House floor today, Congresswoman Maxine Waters (D-CA), Ranking Member of the Committee on Financial Services, took a strong stand against H.J. Res. 88, a Republican measure that seeks to dismantle the Labor Department’s recently finalized rule governing investment advice for retirement accounts.
In her remarks, Ranking Member Waters noted that resolution would invalidate a carefully crafted rule that would close loopholes and gaps in the law and require all advisers to put their clients’ interests ahead of their own. Waters also highlighted that “hundreds of stakeholders who represent the financial services industry, the public interest, civil rights, consumers, labor unions, and many investment advisers who are already providing advice to savers under a fiduciary standard” have come out in favor of the rule.
According to a statement of administration policy, the White House “strongly opposes” H.J. Res. 88, and if this bill were to reach the President’s desk, he would veto the bill.
Full text of the remarks, as prepared for delivery, is below.
Mr. Chairman, I rise today in strong opposition to House Joint Resolution 88, which would invalidate the Labor Department’s recently finalized fiduciary duty rule and threaten our seniors’ retirement savings to the tune of $17 billion per year.
The rule closes loopholes and gaps in our laws so that all financial advisers act in their clients’ best interest when providing advice on retirement investments. This is an essential reform that will protect our seniors and ensure our retirees are financially secure.
Not only is this rule a common sense update, but the Labor Department worked diligently to address all legitimate stakeholder concerns. And Secretary Perez should be commended for his exemplary leadership on this issue. The Labor Department spent countless hours reviewing comments, meeting with industry and other interested stakeholders, and responding to lawmakers' concerns. That effort has resulted in a strong, workable rule that takes into account different business models across the industry.
For example, the final rule specifically allows firms to recommend proprietary products as long as they make certain disclosures and act in the client’s best interest. It streamlines those required disclosures to make it easier for firms to comply. It provides flexibility in the timing of a contract between a client and adviser. And it establishes clear distinctions between what is considered education and advice. Overall, the final rule is carefully crafted to protect investors while creating a workable process for financial advisers.
What’s more, the rule is supported by hundreds of stakeholders who represent the financial services industry, the public interest, civil rights, consumers, labor unions, and many investment advisers who are already providing advice to savers under a fiduciary standard.
And yet my colleagues on the other side of the aisle are so intent on dismantling this crucial rule. This resolution is not their first attempt. H.R. 1090, which went through my Committee and passed the House largely along party lines, would have imposed unacceptable delays on the Labor Department’s rulemaking effort. Different measures were considered in other Committees that would have replaced the rule with a harmful alternative. And riders were attempted on appropriations bills to prevent the Department from working on this rule altogether.
Now, Republicans may have the votes to pass the disapproval resolution on a simple majority. But the President will veto this bill, and Democrats will stand strong to ensure that they cannot override that veto. We will ensure that the laws protecting our seniors’ savings are as robust as possible in a fair market. We will ensure that hard-working Americans can trust their financial advisers and make sound investments. And we will ensure that everyone has the right to retire with dignity and security.