Ranking Member Cassidy, Budd Slam DOL’s New Fiduciary Rule Threatening Americans’ Access to Retirement Savings
WASHINGTON – Today, U.S. Senators Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, and Ted Budd (R-NC) slammed the Department of Labor’s (DOL) final rule that expands DOL’s regulatory power over financial advisors, drastically increasing their cost of compliance and restricting access to retirement investment savings for the majority of low-income Americans. Currently, financial advisors are required to abide by the rigorous best interest standard. This standard protects Americans from being sold deficient products while allowing them to buy from broker-dealers without having to pay for the more expensive fiduciary-level advice.
The new Biden policy is similar to the previous Obama-era fiduciary rule that had significant negative impacts on American investors. Specifically, a 2017 study of one-third of American financial advisors found that 29 percent of brokers limited their services, while 24 percent removed whole suites of services due to the rule, disproportionately harming lower- and middle-income savers. Additionally, 95 percent of brokers made changes to the products available to retirement investors, including eliminating or limiting asset classes offered. In 2018, the Obama fiduciary standard was struck down in federal court due to violations of congressional intent.
“The Biden administration’s priority should be making it easier for Americans to invest for a secure retirement. Instead, this policy imposes burdensome regulations that restrict investing opportunities, especially for those who are lower- and middle-income,” said Dr. Cassidy. “Americans should be encouraged to save by, among other things, minimizing hassle. This is whether they are saving for retirement, a child’s education, or for the unexpected life event.”
“The Biden administration’s proposed rule not only poses a significant risk to consumers, investors, and the financial services industry, but it also threatens our economic stability. It also creates unnecessary bureaucratic burdens, duplicates existing regulations, hinders innovation, and threatens to leave investors in the dark. Congress and the courts should act swiftly to stop this harmful rule from taking effect,” said Senator Budd.
Last year, Cassidy rebuked the proposed regulation and urged DOL to cease any further action to amend the definition of an investment advice fiduciary. Additionally, Cassidy highlighted DOL’s multiple conflicting positions on the fiduciary rule and how it has caused serious damage to American savers.
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