Legislation that would stop the Department of Labor’s proposed fiduciary rule in its tracks is scheduled for a hearing this week.
The “Ensuring Accountability in Agency Rulemaking Act,” which would require the head of an agency to issue and sign any rule issued by that agency, is headed for a hearing in the House Rules Committee tomorrow.
The bill would block the DOL’s fiduciary rule because of the status of acting DOL Commissioner Julie Su.
While Su has served as acting DOL Secretary since March, following former DOL Secretary Marty Walsh’s February resignation, she has never been confirmed as DOL secretary.
Su was confirmed by the Senate as deputy secretary of labor, but amid controversies over her tenure as secretary of the California Labor and Workforce Development Agency, her confirmation has not been put to a full vote.
The bill, which was introduced by Rep. Ben Cline of Virginia and four other Republicans, has an additional 12 co-sponsors in the GOP-led House. It would require that “federal regulations shall be issued and signed by an individual appointed by the President, by and with the advice and consent of the Senate.”
The bill stands little chance of becoming law since it needs the signature of President Joe Biden, who has touted the DOL rule as a necessary move to deal with unethical brokers who are “scamming Americans out of hard-earned money.”
The DOL’s proposed fiduciary rule would greatly expand the definition of a fiduciary advisor to apply to most brokers and insurance and annuities agents. For the first time, the proposed rule would also require all professionals who make even one-time rollover advice to participants in a qualified plan or IRA to provide their justification for the transfer in writing to clients. It would also allow class action lawsuits.
The insurance and annuities industry, which has successfully battled the DOL over a similar rule in court previously, welcomed movement on the bill, which was introduced in January.
“This is another example of members of Congress expressing their concerns about the harm the U.S. Department of Labor’s proposed fiduciary rule for investment advice will cause to millions of America’s workers and retirees,” Paul Richman, chief government and political affairs officer at the Insured Retirement Institute, said in a statement.