The Senate voted Tuesday to disapprove and nullify the new fiduciary rule released by the Department of Labor, by a vote of 56-41, along party lines. The House of Representatives passed a similar measure on April 28, also along party lines.
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, within 60 legislative days of the rule's release, which was April 6. The Congressional Review Act is rarely used because presidents can veto them, and President Barack Obama has promised to veto the resolution.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, during Senate floor debate called the resolution “the best near-term vehicle we have to putting the administration in check with regard to this rule.” Mr. Hatch has drafted legislation to give the Treasury Department jurisdiction over rules governing financial advice and marketing.
Sen. Johnny Isakson, R-Ga., a sponsor of the measure, has also introduced legislation that would block the Department of Labor rule without congressional approval, and allow some types of investment advice to be exempt from prohibited transaction rules.