CONGRESSMAN BISHOP STATEMENT REGARDING NULLIFYING DOL FIDUCIARY RULE
WASHINGTON, DC – Today, Congressman Sanford D. Bishop, Jr. (GA-02) released the following statement regarding his disapproval of H.J. Res. 88, a U.S. House joint resolution disapproving and nullifying a Department of Labor rule published on April 8, 2016 relating to the definition of the term "fiduciary" and the conflict of interest rule with respect to retirement investment advice.
“While the Department of Labor’s final rule is not perfect, it strikes a balance between protecting individuals receiving retirement investment advice and promoting a regulatory environment that does not over burden financial professionals. The vote to change the rule was a counterproductive effort meant to upset this reasoned compromise. During the notice and comment period, Secretary Perez and the Department of Labor did a commendable job incorporating industry concerns and the Financial Industry Regulatory Authority has acknowledged the final rule as a ‘big improvement’ over the draft, thus, I do not believe scrapping the rule is a productive step forward.”
The rule clarifies the responsibilities of broker-dealers with respect to pension and retirement plans. Under current law, a broker-dealer who provides investment advice has only an obligation to provide investment advice at the lower standard of “suitable” to the individual, but not necessarily in their “best interest.” The rule will require broker-dealers to provide retirement investment advice to the higher “best interest” standard and is expected to prevent investment losses of approximately $17 billion per year. It takes effect in April 2017.
H.J. Res. 88 was approved by a vote of 234 to 183. Congressman Bishop voted against the resolution.