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Congressional Dems Pushing Back on Fiduciary Proposal

That rumbling sound you hear could be a growing Democratic pushback on the Labor Department’s fiduciary proposal.

Published reports indicate that a growing number of Democrats — including more than a third in the House — are concerned that the Labor Department’s fiduciary proposal would wind up costing consumers more and limit low-income Americans’ access to financial advice.

The Hill reports that at a meeting last week, congressional Democrats who want significant changes to the rule made their case to Labor Secretary Thomas Perez. “Impractical” was how one senior aide to a House Democrat with concerns about the proposal described the current proposal, though they said that Perez understood Democrats’ concerns and was “convincing and sincere in saying the rule is not final,” according to the report.

The Hill report says many Democrats are concerned that financial advisers who serve low-income Americans would face regulatory burdens that would take away the economic incentive to continue marketing their services to small accounts.

“The meeting with Secretary Perez got heated at times,” The Hill quotes Rep. Gwen Moore (D-Wisc.), who attended the meeting, as saying. “Members have substantive questions about the rule.”

Moore has already persuaded more than 70 House Democrats to sign a letter calling for changes to the administration’s proposal. Moore’s letter comes on top of similar concerns voiced by Democrat Sens. Claire McCaskill (Mo.), Heidi Heitkamp (N.D.), Joe Donnelly (Ind.) and Jon Tester (Mont.).

However, Moore also noted that “the Department is moving to address concerns,” according to the report. “Despite the fiery exchange, I took comfort in seeing Secretary Perez’s willingness to address our collective concerns and find common ground with my Democratic colleagues.”

The reopened comment period on the proposal closes this week.

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