A resolution blocking the Department of Labor’s new fiduciary rule was passed Thursday by the House Education and the Workforce Committee with a 22-14 vote.
On April 6, Secretary of Labor Thomas Perez presented the rule, now called conflict of interest, which goes into effect April 2017.
Under the Congressional Review Act, Congress can pass a resolution of disapproval that legally prevents a federal agency from implementing a rule, or issuing a substantially similar rule without congressional authorization. Successful use of the Congressional Review Act is rare because presidents can veto them. The last one was during the Clinton administration.
The House resolution was introduced by Rep. Phil Roe, R-Tenn., chairman of the Health, Employment, Labor, and Pensions Subcommittee, who argued that other House proposals would keep retirement savings advice more affordable. “We don’t need to choose between supporting affordable retirement advice and ensuring financial advisers act in good faith,” Mr. Roe said in a statement.
A Labor Department spokesman said in a statement that following an inclusive process to simplify the final rule, “many in the retirement investment advice industry have expressed support for the administration’s efforts or have made clear they are encouraged by the final rule and will work with the department to implement the new standards. Unfortunately, it seems congressional Republicans have prioritized protecting those who benefit from the status quo over protecting the best interests of the American people.”
