The Labor Department’s fiduciary reproposal isn’t the only fiduciary-related comeback news on Capitol Hill this week.
Rep. Ann Wagner (R-Missouri) has reintroduced the Retail Investor Protection Act (RIPA) in the U.S. House of Representatives, and in doing so, pushed back on President Obama’s recent support of the DOL’s fiduciary regulation.
“Earlier this week, President Barack Obama and Sen. Elizabeth Warren (D-Mass.) presented a solution in search of a problem by proposing another massive rulemaking from Washington that will harm thousands of low and middle income Americans’ ability to save and invest for their future,” Wagner said in a press release. “This top-down, Washington-centered rulemaking against financial advisors and broker dealers will harm the very middle income families that Sen. Warren and President Obama claim to protect.”
The new legislation will follow the same structure as legislation passed in the last Congress, with a requirement that the SEC would be required to go first in issuing a rulemaking under Section 913 of Dodd Frank before the DOL is able to propose a rule expanding the definition of a fiduciary under ERISA.
In addition, the RIPA would require the SEC to look into potential issues with a rule making establishing a uniform fiduciary standard in regards to investor harm and access to financial products that were not adequately addressed in the agency’s 2011 study, according to a description posted on Wagner’s web site. Additionally, the SEC would be required to look into other alternatives outside of a uniform fiduciary standard that could help with issues of investor confusion, according to an explanation accompanying the press release.
There are, however, two key differences in this version from that submitted in the last Congress:
- The word “systematically” has been dropped from the SEC’s requirement to show whether investors are being harmed or disadvantaged.
- The SEC would also be required to look into alternative remedies that could reduce confusion or harm to investors, such as simplifying the titles used and enhancing disclosure surrounding different standards of care.
