Ranking Member Cassidy Rebukes DOL’s Proposed Rule Putting Americans’ Retirement Savings at Risk

WASHINGTON – Today, U.S. Senator Bill Cassidy, M.D. (R-LA), ranking member of the Senate Health, Education, Labor, and Pensions (HELP) Committee, rebuked the Department of Labor’s (DOL) proposed rule that attempts to expand DOL’s jurisdiction over financial advisors, drastically increasing their cost of compliance and potentially reducing 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. 

This proposed rule 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 should prioritize making it easier for Americans to invest for a secure retirement. Instead, the proposed fiduciary rule imposes burdensome regulations that have already proven to make investing more difficult, 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 ‘I hope it never happens, but I know that it might so let’s be prepared’ life event.” 

Recently, Cassidy and U.S. Representative Virginia Foxx (R-NC), chairwoman of the House Education and the Workforce Committee, urged DOL Acting Secretary Julie Su to cease any further action to amend the definition of an investment advice fiduciary. Additionally, the lawmakers highlighted DOL’s multiple conflicting positions on the fiduciary rule and how it has caused serious damage for American savers. 

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