Congressional Republicans are vowing to fight against new White House regulations that would impose stricter rules on retirement investment advisers.
GOP lawmakers promised to use every tool available to them to delay or otherwise disrupt the new Labor Department rules finalized Wednesday, calling the long-running initiative misguide and harmful.
{mosads}“We will continue to look at every avenue to protect middle-class families and small businesses from government overreach,” said Speaker Paul Ryan (R-Wis.), who had criticized the rule in the previous weeks.
“Congress must act to stop this costly, complicated and potentially conflicting rule that’s unfair to millions of American families who only want the freedom to plan for financial independence and the right to shape their own destiny,” said House Financial Services Committee Chairman Jeb Hensarling (R-Texas).
Despite the GOP outcry, the response from the financial industry, which fiercely contested the rule-making, was much more muted. Most industry groups took a measured tone, saying they have concerns about the overall project but want to review the new rule, which is expected to run hundreds of pages, before issuing a final verdict.
“Policymakers should do everything they can to help Americans be more prepared for retirement and not create red tape that makes saving for retirement more difficult,” said Tim Pawlenty, CEO of the Financial Services Roundtable.
That group, which represents the largest names in the financial industry, said it was reviewing the final rule “to determine any appropriate further action.”
While industry groups review the rule, Republicans are resolute in their vow to fight against it. House lawmakers, primarily Republicans, have already passed legislation that would delay the rule-making effort, and legislators said they plan to revisit such legislation in the wake of a final rule.
Even Republicans in tough reelection races, like Sen. Mark Kirk (R-Ill.), criticized the initiative. Kirk previously sponsored legislation that would require Congress to sign off on any such rule-making.
“I am disappointed the Department of Labor is moving forward with its misguided government takeover of Americans’ retirement planning despite bipartisan opposition,” he said in a statement.
Despite the promise to fight, any effort to upend the new rules via legislation is likely to be a long shot. Even if Republicans can garner enough Democratic support to push a bill through both chambers, the White House would almost assuredly veto the legislation. President Obama made the initiative a top priority one year ago, reviving a proposal that had stalled in prior years.
At the heart of the battle in a new set of rules imposing a fiduciary duty on retirement investment advisers. Under the new rules finalized Wednesday, advisers must act solely in the interests of their clients, and the White House argues the new regulations will ensure Americans are not steered toward improper investments by advisers looking to reap higher fees.
But blocking the rule-making effort, which has spanned years, has been one of the top priorities of the financial industry. Financial firms argue the new requirement would prove immensely costly and burdensome, and could prevent less wealthy Americans from receiving retirement advice at all.
Advocates for the rule argued just the opposite, saying the only advisers to be harmed by the rule would be ones taking advantage of clients in the first place.
“I am very confident the industry will be able to comply with this streamlined rule,” said Labor Secretary Thomas Perez.
Proponents of the rule argue it could save Americans billions of dollars that will now help fill their retirement coffers.
Sen. Elizabeth Warren (D-Mass.) said the new rules are bad news for “slick-talking advisers pushing complicated products.”
“This is an enormous victory for hard-working Americans,” she added.