The resolution, approved by a vote of 56 to 41, is a largely
symbolic move that President Barack Obama has already threatened to
veto. The House of Representatives passed a similar version last
Obama's administration in April released the rule setting a
fiduciary standard for financial brokers who sell retirement
products, requiring them to put clients' best interests ahead of
their own bottom lines.
Tuesday's arguments revolved around what is best for middle- and
Republicans, who control both chambers of Congress, say the rule
will be expensive for brokers and force them to get rid of Main
Street clients and small businesses that offer 401(k) plans. They
also say the rule does not take into account existing regulations on
Democrats say profit-hungry advisers have exploited middle- and
lower-class workers by recommending retirement products that mostly
serve to line their own pockets.
Kicking off the debate, the most powerful Republican in the Senate,
Kentucky's Mitch McConnell, said blocking the rule would help
"I have sincere concerns about what this could mean for the ability
of investment advisers to provide quality financial advice, but also
for the ability of consumers to seek affordable retirement options,"
Nevada's Harry Reid, the most powerful Democrat in the chamber,
countered that there was nothing wrong with "a rule that would
require investment advisers to act in the best interest of their
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One Republican, Georgia Senator Johnny Isakson, described the rule
as "a solution in search of a problem," while fellow party member
Lamar Alexander of Tennessee said "we should call this the 'Only the
Rich Retire' rule."
Democrat Cory Booker of New Jersey said the rule would allow people
to "retire with dignity" and without worries that an "adviser will
Fellow Democrat Patty Murray of Washington said: "Some financial
advisers have lined their own pockets by steering clients toward
complicated investments. Some have recommended that retirees make
transactions that come with hidden fees. And some get commission
when they sell a financial product, even if it doesn't make sense
for a client," she said.
"We finally have a new protection that would right that wrong."
(Reporting by Lisa Lambert; Editing by Dan Grebler)
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