Business

Dems not sold on Obama’s financial adviser regs

by Kevin Cirilli - 09/15/15 12:24 PM ET

House Democrats are raising concerns about President Obama’s proposal for financial advisers.

Nine House Democrats are circulating a letter calling on Obama and Department of Labor (DOL) officials to refine its regulatory proposal for financial advisers.

The administration wants to increase regulations for financial advisers to better protect consumers from financial advisers who make money off selling bad advice to consumers by earning commissions from financial institutions.

But the financial advising industry argues that the regulations are unneeded, since they have protocol in place to weed out bad actors, and that the new rules would end up raising costs on low- and middle-income Americans.

“We continue to hear from constituents, academics, providers, and investors that there are specific provisions of the Rule that may cause market disruptions and limit the ability of segments of the market to reasonably access advice,” nine House Democrats wrote in a letter that’s being circulated to members this week, first obtained by The Hill.

The group of lawmakers who have already signed onto the letter includes members of the moderate New Democrat Coalition and the Congressional Black Caucus.

Democratic Reps. Gwen Moore (Wis.), Grace Meng (N.Y.), Ron Kind (Wis.), Emanuel Cleaver (Mo.), Ann McLane Kuster (N.H.), John Larson (Conn.), Richard Neal (Mass.) and Kyrsten Sinema (Ariz.) signed the letter.

Obama and Sen. Elizabeth Warren (D-Mass.) announced the proposal with great fanfare earlier this year.

“In order to have a successfully implemented rule, it is vital that the proposal doesn’t limit consumer choice and access to advice, have a disproportionate impact on lower- or middle-income communities, or raise the costs of saving for retirement,” the lawmakers wrote.

Last month, moderate Senate Democrats criticized the proposal, too. Sens. Claire McCaskill (Mo.), Jon Tester (Mont.), Heidi Heitkamp (N.D.) and Joe Donnelly (Ind.) have all raised concerns about the proposal.

Tags Claire McCaskill Elizabeth Warren Gwen Moore Heidi Heitkamp Joe Donnelly Jon Tester Ron Kind