Labor Secretary Thomas Perez is receiving backup from a diverse group of House Democrats as the agency works to update its fiduciary rule.
Rep. Maxine Waters, D-Calif., ranking member of the Financial Services Committee, and Bobby Scott, D-Va., ranking member of the Education and Workforce Committee, were joined by a dozen other House members in a letter sent Wednesday to Mr. Perez calling for a new standard to replace one implemented 40 years ago that did not address IRA rollover advice and other recent practices. The members said they expect the DOL to address “any legitimate concerns” raised, but “we also believe that some of the claims and objections that have been raised are overstated or outright false,” particularly claims that the proposed rule will harm small savers.
The Department of Labor received 2,254 comment letters on its proposal to update its fiduciary rule as of July 21, the end of the comment period. Hearings on the comments and next steps will be held the week of Aug. 10. The public comment period will reopen for up to 45 days after the hearing transcript is published in the Federal Register.
In a July 21 comment letter, BlackRock executives argued the proposal’s “critical flaw” is that it is not tailored enough to address problem areas such as rollovers of individual retirement accounts, and might not facilitate more retirement savings as intended.
“We believe that the structure and burdens imposed by the proposal will create a regulatory environment that is inconsistent with our shared goal and will produce the opposite of the intended effect,” wrote Barbara Novick, vice chairwoman, and Patricia Anne Kuhn, managing director in the legal and compliance department at BlackRock. They called for clarifications that would allow for investment alternatives education, a streamlined “best interest contract,” and expanded exceptions for existing market practices. They also called for the Securities and Exchange Commission to be the first agency to produce a uniform standard for retirement and individual savings accounts.