Top Republican presses for ‘fiduciary rule’ details

Senate Homeland Security and Governmental Affairs Committee Chairman Ron JohnsonRonald (Ron) Harold JohnsonGOP senators double down on demand for Clinton email probe documents Congress opens door to fraught immigration talks McConnell: 'Past time' for immigration-border security deal MORE (R-Wis.) is pressing administration officials on how they'll impose looming regulations for financial advisers that Republicans say will cut access to low-income Americans.

Johnson is asking Department of Labor Secretary Thomas PerezThomas Edward PerezClinton’s top five vice presidential picks Government social programs: Triumph of hope over evidence Labor’s 'wasteful spending and mismanagement” at Workers’ Comp MORE to explain how the new regulations won't "adversely affect middle and low-income Americans," according to the Feb. 5 letter obtained first by The Hill on Monday.

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Republicans and centrist Democrats, backed by the business community, are fighting back against Obama official's plans to propose new regulations against financial advisers and investment dealers charged with helping Americans with their Individual Retirement Accounts and 401(k)s.

Administration officials want more stringent disclosures requirements — known as the "fiduciary rule" — for the industry about their commissions, arguing that it'll cut back on bad actors selling faulty financial plans while pocketing commissions off unsuspecting Americans.

But critics argue that the regulations, which failed to gain traction in 2010, would change the industry's payment model so radically that financial advisers would no longer have a financial incentive to serve low- and middle-income Americans' accounts, which are less lucrative than big businesses.

As a result, low- and middle-income Americans would lose out on financial advice, they argue.

Johnson asked Perez to explain its role in drafting a senior White House memo co-authored by Council of Economic Advisers Chairman Jason FurmanJason FurmanThe Hill's Morning Report - Dems contemplate big election and court reforms On The Money: Trump presses GM, union to start talks over closed plant | Trump renews call to cut arts, PBS funding | Alan Krueger, former Obama economic adviser, dies at 58 | Americans expected to bet .5B on March Madness Alan Krueger, former chief Obama economic adviser, dies at 58 MORE last month that championed the new regulations. The industry heavily criticized the memo with presenting a one-side argument in favor of new regulations.

Johnson is asking for a response by Feb. 19.

Last week, Sen. Elizabeth WarrenElizabeth Ann WarrenOvernight Defense: Reports detail effect of transgender military ban | Watchdog auditing 8 billion submarine program | Warren questions top general on climate change Booker calls for sweeping voting rights reforms Warren praises Ocasio-Cortez in Time 100 MORE (D-Mass.) alluded to the issue at a Senate Special Committee on Aging hearing, signaling that she would support the administration.

"We need to do more to protect our seniors, but also particularly to make sure that financial advisers don't steer their clients into retirement products that maximize the advisers' profits while they drain away the clients' savings," Warren said at the hearing.  

 

Sen. Ron Johnson letter

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