Omnibus does not delay contentious investment rule

The financial industry failed to block a reviled rulemaking project that would impose new rules on retirement investment advisers as part of the $1.1 trillion spending bill.

The omnibus spending packaged unveiled early Wednesday morning does not include a policy rider that would delay a new “fiduciary duty” rule being drafted by the Labor Department.

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Its exclusion is a major setback for the financial industry, which had been pushing hard to include any sort of language that would delay the rulemaking. It also is a major win for the Obama administration, which had thrown its weight behind the contentious rulemaking and fought back against efforts to delay it.

Under the rule, which now will likely be finalized sometime in early 2016, retirement investment advisers would have to act solely to the benefit of their clients. Proponents of the rule, including President Obama and Sen. Elizabeth WarrenElizabeth Ann WarrenPossible GOP challenger says Trump doesn't doesn't deserve reelection, but would vote for him over Democrat Joe Biden faces an uncertain path The Memo: Trump pushes back amid signs of economic slowdown MORE (D-Mass.), argue it would help protect investors from being steered to pricey financial products that aren’t in their best interest.

But the financial industry fought the effort tooth and nail, arguing it would drive up the cost of investment advice and eventually would prevent some Americans from having access to any advice at all.

The industry engaged in intense lobbying both at the regulator and on Capitol Hill to slow or otherwise disrupt the effort. Some Democrats did join Republicans in airing concerns about the measure, but interest from the White House and other Democrats in seeing the initiative through apparently carried the day.

Language delaying the fiduciary rule was included in versions of earlier appropriations legislation passed by panels in both the House and Senate, and including a delay in the omnibus bill was a topic of debate among negotiators. But the final omnibus package, which looks set for passage by Congress later this week, saw that language stripped out.

Unable to slow the rule via a government funding bill, the industry ramped up calls for the Labor Department to revisit its own efforts.

"We continue to believe the [Department of Labor] rule as proposed will have negative consequences for retirement savers: restricting access to financial advice and raising the cost of saving,” said Ken Bentsen, president and CEO of the Securities Industry and Financial Markets Association. “As we have repeatedly said, there are so many issues with the proposal, as evidenced by the thousands of substantive comments filed, that the Department should re-propose the rule."