Overnight Regulation

Overnight Regulation: Dems blast delay of financial adviser rule | Senators spar over FDA pick’s business ties

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Welcome to Overnight Regulation, your daily rundown of news from the federal agencies, Capitol Hill, the courts and beyond. It’s Wednesday evening here in Washington, where one of President Trump’s top advisers, Stephen Bannon, lost his spot on the National Security Council. Read more here.

Here’s what else is going on.



Financial adviser rule delayed

Critics blasted the Department of Labor’s decision to delay the Obama-era rule on investment advisers for 60 days.

The delay means the rule is now slated to take effect on June 9. But the extra time also gives regulators more time to begin a new rule-making process to undo it entirely.

The so-called fiduciary rule, which was set to go into effect next week, broadly requires financial advisers to act in the best interests of their clients.

The rule sparked strong opposition from the financial industry, which said it was too broad. They warned it would impose burdensome reporting requirements on advisers and could lead to higher costs, making it harder for lower-income Americans to get financial advice.

But supporters said of the rule would prevent conflicts of interest for retirement advisers and others who often get commissions for certain financial products they recommend to clients.

On Wednesday, those who back the rule said American workers would lose $46 million in retirement savings each day it is delayed.

The AFL-CIO and Sen. Elizabeth Warren (D-Mass.) released a “Retirement Ripoff Counter” on Wednesday, which tracks how much money American workers will lose.

“That money matters — it’s the difference between retiring with dignity and fighting to stretch every dollar as far as it will go,” Warren said.

AFL-CIO President Richard Trumka said a rule asking advisers to work in the best interests of their clients is “not too much to ask.”

“We pay them, and they should work for us.”

The Retirement Ripoff Counter claims savers lose $532 per second, $1.9 million per hour and $46 million per day. This comes out to nearly $2.8 billion over the 60-day period the rule will be delayed.

These figures are based on a 2015 cost estimate from the White House Council of Economic Advisers, which claimed retirement financial advisers cost people $17 billion each year in retirement savings by directing them to other financial products.

Click here for the story.


Senators battle over FDA nominee’s financial ties

President Trump’s nominee to lead the Food and Drug Administration faced repeated questions Wednesday over possible conflicts of interest related to his financial ties to an industry he would be tasked with regulating.

Democrats on the Senate Health, Education, Labor and Pensions Committee peppered Scott Gottlieb with questions about whether he would be unable to separate himself from the interests of more than two-dozen drug and medical device companies he’s either invested in or consulted for.

“The worry here is that there will be industry-supported reforms that will find a voice inside of the agency because of your connection to the industry,” Sen. Chris Murphy (D-Conn.) said.

Murphy brought up an article Gottlieb wrote in the New England Journal of Medicine in which he proposed creating a politically accountable board to decide which drugs get FDA approval.

“It seems like it would be a big gift to the drug industry, being able to use their political donations in order to ultimately put a group of friendlies on a process or commission that decides approval, rather than having that process sheltered from the political process,” he said.

Gottlieb said he believes the approval process has already become politicized and he was simply trying to find a way to make the process more transparent.

Republicans countered, arguing that Gottlieb’s experience in the healthcare field as a former physician and consultant that makes him qualified to lead the agency.

“As to his work with companies that have to do with drugs and food, that’s not so unusual for someone who is going to be head of the FDA, and in my view, it helps to have somebody who knows something about the subject,” committee Chairman Lamar Alexander (R-Tenn.) said.

Click here for the story.




The Senate Finance Committee will hold a business meeting to vote on the nomination of Robert Lighthizer to be the U.S. trade representative. 

The House Financial Services Subcommittee on Financial Institutions and Consumer Credit will hold a hearing to look at the federal financial regulatory system. 

The House Small Business Committee will hold a hearing to discuss whether the IRS is effectively protecting small business information. 



–The Department of Labor (DOL) will delay the Obama-era rule on financial advisers.

The fiduciary rule, which was set to go into effect next week, required retirement financial advisers to act in the best interest of their clients. But the Trump administration will delay the rule by 60 days, until June 9.

This will give the Labor Department more time to kill the fiduciary rule.

–The Consumer Financial Protection Bureau (CFPB) will issue a study on the consumer reporting industry.

The CFPB released the report last month, but will now formally post it in the Federal Register, making it official.

The study looks at “consumer reporting companies, and at companies that furnish information to consumer reporting companies,” the agency says.

–The Environmental Protection Agency (EPA) will temporarily change the electronic reporting requirements for coal and oil power plants.

The changes go into effect immediately.



Trump’s fiduciary delay will cost retirees $2.8B, critics say 

FDA won’t commit to banning flavored e-cigarettes, cigars 

Dem hammers FDA nominee over ties to healthcare firms 

Republican tax-writers urge Trump to fire IRS chief

GOP makes case for firing consumer bureau chief

Groups sue EPA for not banning pesticide

Senate Dems press internet service providers over privacy policies

Fight breaks out over internet privacy repeal at hearing

FCC head announces new office focused on economics

Gasoline stations team up to fight ethanol mandate change

Privacy fight gives hope to net neutrality advocates

Court rules Civil Rights Act protects LGBT employees from discrimination 

Kansas City, Mo. voters approve $25 fine in easing of marijuana laws – NPR 

Trump declares end to ‘war on coal,’ but utilities aren’t listening – Reuters 



5: Proposed rules

9: Final rules

(Source: Thursday’s Federal Register)



“The worry here is that there will be industry supported reforms that will find a voice inside of the agency because of your connection to the industry,” Sen. Chris Murphy (D-Conn.) told Trump’s FDA nominee Scott Gottlieb at his confirmation hearing. Dems are worried about Gottlieb’s ties to the drug industry and about potential conflicts of interest at the agency. The nominee has vowed to recuse himself from any such matters. Read more here.

We’ll work to stay on top of these and other stories throughout the week, so check The Hill’s Regulation page (http://thehill.com/regulation) early and often for the latest. And send any comments, complaints or regulatory news tips our way, tdevaney@thehill.com or lwheeler@thehill.com. And follow us at @timdevaney and @wheelerlydia.

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