The House Financial Services Committee approved legislation May 4 that would rein in the Consumer Financial Protection Bureau and provisions of Dodd-Frank, and repeal the Labor Department’s fiduciary rule.
The 34-26 vote along party lines followed three days of intense debate regarding the Financial CHOICE Act of 2017.
Supporters of the bill say that “imposing the DOL’s severely flawed fiduciary duty rule on broker-dealers will raise costs and reduce access to investment advice for retail investors, costing Americans billions of dollars in lost retirement savings.”
Sponsors of the legislation go on to note that, “driven by a belief that the financial crisis resulted from a lack of regulation, the drafters of the Dodd-Frank Act promised that by increasing government oversight and control over the economy to an unprecedented degree, they would head off future financial crises.”
The executive summary of the bill notes that, “While the Department of Labor recently finalized its rules to amend the definition of ‘investment advice’ to expand the class of financial professionals subject to fiduciary duties covered by the Employee Retirement Income Security Act of 1974 (ERISA), the SEC is the agency that Congress designated to oversee and regulate the conduct of persons providing investment advice and effecting securities transactions in the United States. If changes are necessary to the delivery of financial advice, the capital markets regulatory authorities should undertake the action necessary to address any perceived inadequacies.”
The bill now moves to the full House of Representatives. Even if it passes the House, the legislation would move to the U.S. Senate for consideration, where the bill’s prospects would seem to be pretty dim.