Challenges and Questions Mount Related to the DOL's Proposed Fiduciary Rule

As noted above, stakeholders in the employee benefits industry have raised questions and concerns about the DOL’s proposed fiduciary rule.  Recently, a group of Democratic members of the House of Representatives submitted a letter to the DOL raising concerns about the proposed rule — although those comments generally have not been interpreted as urging a withdrawal or attempting to prevent its issuance in final form.  Others on Capitol Hill have considered more forceful action to prevent issuance of a final rule (including efforts to cut off DOL funding for implementation of the final rule).  On September 30, 2015 two hearings took place on Capitol Hill raising concerns about the rule and/or considering roadblocks to its implementation.  

First, the House Financial Services Committee approved the Retail Investor Protection Act (H.R. 1090), which would suspend DOL consideration of its fiduciary rule and require the Securities and Exchange Commission to move first on writing a uniform fiduciary standard. The vote on the bill, which was introduced by Rep. Ann Wagner (R-MO), fell along partisan lines with Democratic members of the committee voting against the proposal.  While acknowledging improvements in the DOL’s proposed rule are needed, the Democratic members urged their Republican counterparts on the Committee to instead work with the DOL to secure those improvements.  The prospects for this bill are by no means clear, and the remaining legislative schedule alone presents a formidable challenge.  

In addition, the House Ways and Means Subcommittee on Oversight also conducted a hearing on the DOL’s proposed fiduciary rule.  Once again, the Republican members of the subcommittee were united in opposition to the rule (as were the majority of the persons offering testimony), while the Democratic members were looking for ways to secure improvements to it.  Some Democrats acknowledged that the present rule is not perfect and that some changes should be examined.  While the political sides are clear, what future steps can and will be taken are by no means clear and bear watching.