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DOL Nominee Faces Pushback on Fiduciary, ESG Rulemaking

Regulatory Agencies

Appearing before the House Committee on Education and the Workforce in her capacity as Acting Secretary of the Department of Labor, Julie Su withstood more than three hours of questioning from committee members, which ran the gamut from apprenticeship programs to child labor laws to California’s AB 5 changing the state’s worker classification laws.

The hearing was billed as an examination of the policy priorities of the Department of Labor, where Su did tout the agency’s funding request under the Biden Administration’s fiscal year 2024 budget proposal for a Missing Participants Program and the establishment of a Retirement Savings Lost and Found, as required by the SECURE 2.0 Act.  

As expected, Su did face harsh questioning and criticism from Republican members of the committee. In fact, Committee Chair Rep. Virginia Foxx (R-NC) in her opening statement noted that she had to threaten the issuance of a subpoena to get Su to appear for questioning after the DOL nominee tried to cancel her appearance.[1]

“This hearing is not about you or your pending nomination; it is about assessing the budget proposal for the Department of Labor and the Department’s performance and adherence to its statutory mandate. However, your effort to evade transparency at the eleventh-hour calls into question your ability to fulfill your duty as a potential Secretary of Labor,” Chair Foxx stated.  

Fiduciary, ESG and QPAM Rulemaking

In the retirement space, Rep. Tim Walberg (R-MI) warned Su about the DOL’s forthcoming fiduciary rulemaking proposal, noting that he has concerns that people will lose access to investment advice.

“And that’s a concern that many people will lose access to common-sense financial counseling at a level that they can afford and pay for; I thought we had already achieved that, so that’s a concern that were going back again on areas that frankly appear to be working,” Walberg noted.   

“It is on our agenda, but we will be certain to be listening to all stakeholders, all parties ... we want to make sure that all stakeholders and constituents are heard,” Su responded.  

Later in the hearing, Rep. Rick Allen (R-GA) advised that he, along with Rep. Andy Barr (R-KY), will be reintroducing their legislation to codify parts of the DOL’s rule under the Trump Administration that required investment advisors to consider only monetary factors when making investment decisions.

“When making investment decisions, your department had a rule, and that is precisely why Congressman Barr and I in the last Congress introduced the Ensuring Sound Guidance Act to ensure that retirement account managers consider only monetary factors and returns when making decisions on behalf of their clients unless otherwise authorized,” Allen told Su.  

In further expressing alarm at the rulemaking process, Allen requested that Su look into what occurred during the development of the so-called ESG rule, noting that there were a number of reports the DOL decided to rescind the Trump rule based on meetings that occurred behind closed doors and were not disclosed. The Georgia representative requested that Su have someone in organization look into what happened and to provide the names of everyone they met with.

Allen further noted that he has heard many concerns from stakeholders about the DOL’s QPAM exemption proposal, and asked her to commit to providing a cost-benefit analysis on the proposal.

Nomination Stalled?

Meanwhile, the Senate HELP Committee on April 20 held a hearing on Su’s nomination to serve as Secretary of Labor, replacing Marty Walsh, who stepped down to lead the NHL Players Association, but there has been no action yet in the full Senate.

A replay of the June 7 hearing can be viewed here.


[1] Beyond appearing before the Senate Health, Education, Labor and Pensions Committee for her nomination hearing, this was Su’s first appearance before Congress in her capacity as Acting Secretary, following the resignation of former Secretary Marty Walsh.