Several Republicans and Democrats on the House Financial Services Committee are urging President Obama to go back to the drawing board with a controversial regulatory proposal for financial advisers.
Reps. Ann Wagner (R-Mo.), Andy BarrAndy BarrOvernight Defense & National Security — White House raises new alarm over Russia GOP lawmakers press administration on US weapons left behind in Afghanistan GOP Rep. Andy Barr reports M in cash ahead of 2022 election MORE (R-Ky.) David Scott (D-Ga.) and Lacy Clay (D-Mo.) are circulating a letter to colleagues warning that the “fiduciary” proposal put forward by the Obama administration could limit the availability of financial advice to the middle class.
"We ask that you join our letter to the Department of Labor asking for a re-proposal on their fiduciary rule-making, in order to ensure that there are no unintended consequences in enforcing a best interest standard that could negatively impact millions of low- and middle-income investors," Wagner wrote in the letter, which was first obtained by The Hill.
Wagner has emerged as one of the top critics in Congress of the regulatory push, which is being carried out by the Department of Labor.
But the involvement of Scott and Clay — two prominent members of the Congressional Black Caucus — indicates there is also skepticism among Democrats about the rule, which is strongly opposed by the business community.
The Labor Department scheduled to have a hearing on the issue in early August. They are pushing for new disclosure requirements for financial advisers, arguing that consumers should be told how their financial advisers are being paid when they sell them financial advice.
Business groups say the rule as written will have sweeping repercussions on the financial industry, shutting out small investors in the process. Top financial groups including the Securities Industry and Financial Markets Association (SIFMA) and the Financial Industry Regulatory Authority (FINRA) have criticized DOL's effort.
The lawmakers wrote in their letter the the rule’s "heightened consumer protections in the investment space should apply broadly and should not create two classes of investors, especially at the expense of those saving for retirement."