Senate Democrats urge Obama to rework financial adviser rule

Eight Democratic members of the Senate Finance Committee are raising concerns over President Obama’s proposed regulations on financial advisers, saying they could hurt low- and middle-income Americans’ access to financial advice.

In a letter sent Friday to Department of Labor (DOL) Secretary Thomas Perez, the lawmakers urged him to make changes to the regulatory proposal.

“It is critical that the final rule be operational and one that in practice is useable,” the lawmakers wrote. “We also believe that it is important that any guidance enhance and not diminish savings opportunities for small businesses and moderate income families.”

{mosads}Democratic Sens. Ron Wyden (Ore.), Debbie Stabenow (Mich.), Bob Menendez (N.J.), Tom Carper (Del.), Ben Cardin (Md.), Michael Bennet (Colo.), Bob Casey, Jr. (Pa.) and Mark Warner (Va.) signed the letter.

The administration is pushing new requirements for financial advisers to disclose how they receive payments from financial institutions off selling investment advice to consumers.

The business community, Republicans and an increasing number of Democrats argue that proposal is unworkable and needs significant changes.

They say the proposal would force Americans into using automated financial services and significantly increase the costs of using human financial advisers because of the new regulatory hurdles.

Wyden’s letter comes following letters last week from Democratic Sens. Claire McCaskill (Mo.), Jon Tester (Mont.), Heidi Heitkamp (N.D.) and Joe Donnelly (Ind.) also criticizing the rule.

Together, 12 centrist Democrats in the upper chamber have publicly criticized the proposal, which also failed to gain traction in 2010.

That opposition increases Republicans’ chances of being able to stall administration officials from implementing the rule through legislative action.

With 12 Democrats on board, Republicans would likely be able to clear the 60-vote procedural hurdle to advance legislation blocking the rules in the fall.

DOL COI Regs Letter 080715