Although the bill faces slim chances of becoming law, it reveals the
depth of feuding in Washington over the 2010 Dodd-Frank Wall Street
reform law's requirement that retirement advisers follow a
"fiduciary" standard that puts their clients' interests first.
The requirement aims to end potential conflicts of interest by
brokers who advise on individual retirement accounts and to protect
consumers from buying unnecessary investment products that line
Last week, the Labor Department sent a revised proposal for an
adviser rule to the White House's Office of Management and Budget.
Details will not be made public until the White House completes its
review. This was the department's second stab at a rule. Wide
criticism from the industry and lawmakers alike forced it to
withdraw its initial proposal in 2011.
The House Ways and Means Committee split along party lines as it
debated the legislation, which would create a "best interest
requirement" and lay out processes for advisers to follow.
Republicans, the majority, touted it as a workable alternative to
the Labor Department's rule, which they said could "frighten off"
middle-income investors from seeking advice and give advisers
incentives to work only for wealthy clients.
They took issue with how the Labor Department drafted its rule, as
well, saying the first version was panned by thousands of people and
complaining that the current version lacked transparency.
"Just disclose it," said Rep. Peter Roskam, of Illinois, who helped
write the bill, in comments directed at the department. "You've
written it. It's done. It's not holy text."
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Democrats said lawmakers should wait to see the Labor Department's
rule before bypassing it. They also complained there were no
hearings on the bill, introduced in December, and said industry
pressure was behind a sudden rush to pass it.
President Barack Obama, a Democrat, would likely veto the
legislation if it passed both the House and the Senate. Democrats
cautioned that the bill's major effect, then, will be to hamper
negotiations lawmakers might want to have with his administration.
Since the initial version was released, Democrats have raised
potential problems they see in the rule with the Labor Department.
(Reporting by Lisa Lambert; Editing by David Gregorio)
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