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House Committee Advances Resolution to Overturn DOL Fiduciary Rule

The House Appropriations Committee approved by a 31-25 vote the Fiscal Year 2025 Labor, Health and Human Services, Education, Transportation, Housing and Urban Development, and Agriculture, Rural Development, and Food and Drug Administration Bills and Revised Subcommittee Allocations.

The approved appropriations measure contains policy riders that would prevent the U.S. Department of Labor from spending money to administer, implement, or enforce several regulations, including its Retirement Security Rule and three related rules involving prohibited transaction exemptions.

Following yesterday’s vote, the Insured Retirement Institute stated their support for the measure and said it will work to educate House members when the bill is considered on the House floor. This is expected in the coming weeks.

“The House Appropriations Committee voted to protect consumers today by approving legislation that includes a provision prohibiting the Department of Labor from spending federal funds to administer, implement, or enforce its harmful fiduciary rule,” said Wayne Chopus, president and chief executive officer of IRI.

“IRI will continue to advocate against this rule, which inhibits consumers’ access to much-needed financial information and guidance to effectively plan for retirement,” Chopus added.

Released in April, the final rule is still scheduled to take effect Sept. 23, 2024. It requires that fiduciaries adhere to high standards when they recommend investments and avoid recommendations that favor the investment advice providers’ interests – financial or otherwise – at the retirement savers’ expense. Under the final rule and amended exemptions, financial institutions overseeing investment advice providers must have policies and procedures to manage conflicts of interest and ensure providers follow these guidelines.

As previously reported by The DI Wire, advocates for fiduciary investment advice like the Institute for the Fiduciary Standard and the CFP Board came out in favor of the rule since it was proposed in 2023.

However, advocacy groups such as IRI and the Financial Services Institute long expressed concern about the consequences of the rule and the hastened regulatory process that transpired for DOL’s final rule.

The resolution provides for disapproval of the fiduciary rule under the Congressional Review Act, which allows Congress to potentially override federal agencies. Now that the Committee has passed the bill, it is eligible for consideration by the full House of Representatives.

In order to take effect and vacate the fiduciary rule, the resolution would have to pass the House and Senate before being signed by the president.

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