House panel votes to overturn Obama’s financial adviser rule

Congressional Republicans are racing to block the Obama administration’s so-called fiduciary rule that requires retirement advisers to act in the best interest of their clients.

A Republican-backed measure that would overturn the fiduciary rule cleared a key House panel Thursday.

The House Education and Workforce Committee voted 22-14 to pass a motion of disapproval under the Congressional Review Act, which allows lawmakers to collectively roll back regulations after they have been finalized.

The disapproval measure will now go to the House floor for a final vote next week, according to Majority Leader Kevin McCarthy (R-Calif.).

Republicans say the rule would make retirement investment advice more expensive for middle- and low-income Americans. But Democrats contend it would bring transparency to the process and protect retirees from bad advice.

“Wealthy Americans can afford to pay for this level of financial assistance,” House Education and Workforce Committee Chairman John Kline (R-Minn.) said at the hearing. “Low- and middle-income families, on the other hand, cannot.”

“We will not support a regulatory regime that restricts access to affordable financial advice and makes it harder for families to save for retirement,” he added.

Rep. Bobby Scott (D-Va.) denounced the bill as “an effort to allow some brokers to continue to put their own interests ahead of the interests of their clients.”

“It seems that some investment advisers are concerned that their business model won’t work if they’re not allowed to cheat people out of their hard-earned retirement savings,” he said Thursday at the hearing.

The Senate is also considering a motion of disapproval against the fiduciary rule. 

If Republicans can muster enough support to pass the disapproval measures in both chambers of Congress, it’s unlikely they will have enough votes on their own to overcome a veto from President Obama.