Dem senators raise concerns over financial adviser rules

Top Democratic senators are raising concerns about President Obama’s push for tougher regulations on financial advisers.

In separate interviews Tuesday, Democratic Sens. Joe Manchin (W.Va.), Ben Cardin (Md.) and Jon Tester (Mont.) said they were concerned about Department of Labor rules increasing disclosure requirements for financial advisers.

Earlier this month, the administration proposed the so-called fiduciary rules, which would require financial advisers to change the way they receive commission payments and inform customers about those payments.

{mosads}The administration says the regulations will better protect Americans from receiving faulty financial advice from advisers looking to sell bad investments in hopes of pocketing lucrative commissions.

The business community, along with Republicans and now some Democrats, say the regulations would end up keeping lower-income Americans from receiving financial advice.

“That’s the issue — that’s the fundamental concern: whether people are going to be denied any advice,” Cardin said.

The 2010 Dodd-Frank Wall Street Reform law requires the Securities and Exchange Commission to study whether implementing fiduciary standards would help consumers. But Labor officials are moving ahead with their own proposal, raising concerns the agencies’ efforts may clash.

“I have questions — I don’t know if I would call them concerns yet. But I want to make sure I understand how it works,” Cardin said. “There’s a couple of questions that I have. I think you have to harmonize it.”

Tester said that the senators met with Labor Secretary Thomas Perez to discuss their concerns. 

“Oh God, yes — definitely I’m concerned. I’m concerned about a lot of things, not the least of which is harmonization,” Tester added. 

The Labor rule is less than a month into a 75-day public comment period. After that, it will go to a public hearing and then another comment period.

Tester called for the administration to “extend the comment period.”

“I don’t think their comment period is long enough. It needs to be extended to get as much input as you can,” Tester said. “This is a big issue. We do not want to cut people out of investing. We don’t want to make it harder for them to invest. We want to make it more safe for them to invest.”

Manchin said that he was concerned the regulations would allow for the “federal government to interview and make [financial] decisions for us.”

“I think basically what you heard from the senators is that we’re still capable of making a decision or two,” Manchin said.

When asked if he supported the regulations, Manchin said: “It makes it very hard — it makes it very difficult [to support] the regulations they’re proposing.

“Let’s see where they go with it,” he added.

Some Democrats in the House are keeping their powder dry on the new rules. Eric Harris, spokesman for Rep. Gwen Moore (D-Wis.), said that Moore is “still in the process of reviewing the rule and will refrain from taking a position until we’ve examined it from all sides.”

“Making a determination on an issue of this magnitude requires perspectives from all of our stakeholders,” Harris said.