By Nick Thornton
Today, President Obama is meeting with independent financial regulators
at the White House, according to a press briefing last week.
Josh Earnest, the White House’s press secretary, did not specify if the President would be discussing the Department of Labor’s proposed fiduciary rule, the final version of which is slated for release within weeks.
But his comments to the White House press corps implied the proposed rule, which would require a fiduciary standard of care on advisors to IRAs and most of the country’s 401(k) plans, is part of the Obama Administration’s eight-year initiative to reform Wall Street, which Earnest said is one of the “key legacy achievements” of the Obama Presidency
“We’re obviously quite respectful of the independent role that these regulators have to play, but there seems value in at least keeping an open line of communication from the White House to these regulators with periodic engagements like this one,” Earnest told members of the press.
The meeting comes as Speaker of the House Paul Ryan, R-Wisconsin, has begun to speak out against the DOL’s rule.
Last month, in the first of several blog posts addressing the fiduciary rule and what Ryan calls DOL overreach, the Speaker’s staff wrote, “we are determined to do everything possible to protect consumers and stop this rule.”
Proposed legislation that would require Congress to vote to allow DOL to finalize its rule
has passed out of two House committees.
Companion legislation in the Senate has yet to be put to a committee vote.
But any legislation that attempts to block the DOL from finalizing its rule would of course have to survive a veto from the White House, which many industry watchers say is unlikely, notwithstanding the broad concerns for the rule Democrats have communicated throughout the rulemaking process.
Republicans may also attempt to defund the DOL’s ability to implement its rule in the party’s fiscal year 2017 budget, which is also expected to be released in coming weeks.
In an interview with the Racine Journal Times, published in a country that Speaker Ryan represents, he said the DOL’s rule is “an example of massive overkill by the federal government.”
“I get more mail on this than anything,” Ryan told the Journal Times.
A blog post published today calls the rule “Obamacare for financial planning.”
Speaker Ryan’s website also called attention to a report that recently emerged from the staff of Sen. Ron Johnson, R-Wisconsin, who chairs the Committee on Homeland Security and Governmental Affairs.
It was issued after a year-long inquiry into the DOL’s rule making process
, and alleges that the DOL willfully ignored input from the Securities and Exchange Commission throughout the rulemaking process, failed to fully comply with executive orders requiring cost-benefit analyses, and accuses the DOL of attempting to stifle the release of documents requested by Sen. Johnson’s staff.
In an interview with Politico, Labor Secretary Thomas Perez said Sen. Johnson’s report “isn’t worth the paper it’s written on.”
“That report is fraught with so many inaccuracies,” Perez told Politico.
“I guess I would ask Sen. Johnson if he had cancer would he want his doctor (to) tell him what’s suitable, or would he want his doctor to tell him what is most likely to save his life,” said Perez, referring to the existing suitability standard governing commission-based
investment brokers, which proponents of the DOL rule say does not go far enough to protect investors from conflicted advice.
A request for comment from Sen. Johnson was not returned before going to press.
Originally posted on BenefitsPro.com