Mediaboss Marketing

House Republicans and the financial services industry want the Department of Labor to delay for even longer the Obama administration's rule on conflicts of interest in retirement investment advice.

In a letter submitted to the agency just ahead of the deadline for comments, House Education and the Workforce Committee Chairwoman Virginia Foxx and other Republicans on the panel told the acting secretary that the "department should not establish an arbitrary applicability date for a regulation that should be rescinded or significantly revised."

The rule, which would reshape the retirement investment industry, has been delayed to go into effect on June 9, thanks to an early executive order from President Trump. The "fiduciary rule," as it is known, would require that all advisers and brokers working with tax-privileged accounts, such as IRAs, act in their clients' best interests. Previously, the Obama White House calculated that savers lose out on $17 billion annually because advisers steer some of them into inappropriate high-fee financial products for which the advisers get kickbacks.

But Republicans warned that allowing the rule to go into effect in June would undermine the reason for the delay in the first place, which was to allow the department to report on whether the rule could lead to a loss of financial advice, cause disruption in the industry or increase litigation.

The agency is in no position to wrap up the analysis before June, and Trump's nominee for labor secretary, Alexander Acosta, has not been confirmed.

House Republicans called for the delay to be extended until the department was ready to revise the rule or rescind parts of it.

Meanwhile, the industry faulted the agency for not initially delaying the rule for longer. The U.S. Chamber of Commerce called for the rule as a whole to be delayed further and warned that the "rush to compliance is hurting the very workers and retirees the department ostensibly sought to protect."

Other industry groups called for the rule to be scrapped entirely. "Based on market experience thus far and our analysis of the data, it is clear that the [Labor Department] will have to either rescind or revise the rule to comply with the president's directive," said Brian Reid, chief economist for the Investment Company Institute.

Advocates of the rule have worried that the delay is the Trump administration's attempt to kill the rule.

For their part, advocates have tried to pressure the administration by keeping a running count of how much investors are losing because they lack protection from unscrupulous advisers. According to the "ripoff" counter, savers are out nearly $3.5 million because the rule was delayed from April.

More:
Republicans, industry want Obama investment conflicts-of-interest rule delayed further - Washington Examiner