Sen. Elizabeth Warren (D-Mass.) put herself in an unusual position Tuesday: as the voice of the financial sector.
The longtime Wall Street critic told the Labor Department in a letter that after surveying dozens of financial institutions, she believes the industry is actually in no rush to see the Trump administration slam the brakes on a contentious investment adviser rule.
But industry groups are crying foul, charging Warren of picking quotes out of more detailed responses to paint support for her cause, when the industry is generally opposed to the rule as it is.
Lisa Bleier, managing director and associate general counsel for the Securities Industry and Financial Markets Association, said Tuesday that financial institutions believe Warren paints a misleading picture in her letter.
“We have heard from several of our firms that the cherry-picked quotes are not an accurate portrayal of the letters that our member firms have told us that they sent,” she told The Hill.
After surveying several large institutions for their thoughts on the “fiduciary rule” — a Labor Department rule now delayed by a President Trump executive order — Warren said there is clear agreement that firms are ready to comply with the requirements and recognize their value to American savers.
“Their overall message was clear: this rule is good for workers saving for retirement and companies are prepared to meet the compliance deadline,” she wrote to acting Labor Secretary Edward Hugler Tuesday.
{mosads}Warren’s interpretation could come as a surprise to some financial firms, as industry groups just days earlier praised President Trump’s move Friday to hit the brakes.
“The Department of Labor’s fiduciary rule is flawed and is causing harm to retirement savers,” said Kenneth Bentsen Jr., SIFMA’s president and CEO, in a statement Friday. “Delaying the applicability date to allow the new Administration an opportunity to review the rule’s impact on investors and the market is appropriate and not without precedent.”
“Financial professionals should act in the ‘best interest’ of their customers but such a requirement should be implemented without miles of bureaucratic red tape,” said Financial Services Roundtable CEO Tim Pawlenty. “The President’s order will allow time for policymakers to get it right.”
Both SIFMA and the Roundtable count among their members several of the firms Warren cited in her letter. And industry groups have also mounted legal challenges to the rule, hoping for it to be struck down and new rulewriting handed over to the Securities and Exchange Commission.
The rule, established under Obama amid strong pushback from industry groups, requires retirement investment advisers to act solely in the interest of their clients. The goal of the rule is to prevent brokers from steering clients into commission-rich but misguided investments.
But industry critics often said the rule as drafted was overly burdensome, and could end up making financial advice less affordable to lower-income savers. Skeptics of the Labor Department project have often argued that the initiative should have been taken up by the SEC, arguing that agency has the proper expertise to put in place such a requirement, even as the agency struggled to advance other projects.
On Friday, Trump signed an executive order ordering the Labor Department to halt the implementation of the rule, and to re-review it.
Warren said that she received responses from 21 large financial firms, and sent snippets to Hugler. The full responses were not made available.
But in Warren’s telling, firms have spent huge amounts of money getting ready to comply with the new requirement and are prepared to play by the new rules when it was supposed to take effect, on April 10.
She noted that some firms said they would appreciate additional time or guidance before having to comply with the rule, but maintained they were the exception.
“The overwhelming voice of financial firms is clear: they support the goals of this rule; they have invested in this rule; they have planned for this rule; and they will be ready by the April deadline,” she wrote.
This post updated at 5:11 p.m.