Last week, the Investment Program Association held its 2017 IPASummit in Washington, D.C., where more than 240 attendees gathered for a series of discussions about the state of the industry.
This year, IPA members held 236 individual meetings with members of Congress, spanning 30 states, to discuss legislation that would provide business development company modernization, accredited investor modernization, preserving the 1031 like kind exchange in upcoming tax reform, and the impacts of the Department of Labor’s fiduciary rule. Regulatory meetings were also held with the SEC, FINRA and NASAA.
Tim Pawlenty, CEO of the Financial Services Roundtable and former governor of Minnesota, gave a keynote address at the 2017 IPASummit and noted that the struggles experienced by the Trump administration in hiring and gaining approval of key staffing positions is impeding regulatory changes – specifically with the DOL’s fiduciary rule.
According to Pawlenty, there are not enough staffers to complete the large economic review of the rule as required by Trump’s February 3rd presidential memorandum.
The U.S. Senate had confirmed 26 of Trump’s executive branch appointments at the 100-day mark, but the pace of regulation is expected to pick up once the appointment process comes to end. Pawlenty noted that it is possible that major changes to the regulatory environment might not happen until 2018.
Pawlenty’s remarks focused on expected regulatory changes in Washington. Federal Reserve chair Janet Yellen will finish her tenure next year, and three Fed governor positions will be open. Consumer Financial Protection Bureau director Richard Cordray will likely be replaced within the near future, spurring change within the agency, and the Financial Stability Oversight Council will likely undergo internal reform. Pawlenty concluded his presentation by touching on cybersecurity, noting that the financial services industry needs to have standardized regulation.
Mark Calabria, the chief economist for Vice President Mike Pence, also shared his insights at the 2017 IPASummit. Calabria, who discussed in broad strokes the forthcoming tax plans from the current administration, reinforced that while there will be significant cuts and simplification, any corporate tax reform will be geared towards fixing the economy.
As the country continues to recover from the financial crisis, Calabria told the audience that one of the President’s main priorities will be to reduce regulatory burden so that productivity can be increased.
“What is not currently being recognized is the work that the Trump administration is doing on the regulatory front,” said Calabria. “The most important things we will accomplish will be on the regulatory front.”
Calabria received several questions from the audience regarding the Department of Labor and attendees to remember that their voice in advocating for issues, like the fiduciary rule, will always be a powerful tool in accomplishing a positive outcome.
Brad Campbell, a partner at Drinker Biddle, the former assistant secretary of Labor for Employee Benefits and former head of the Employee Benefits Security Administration, outlined the effects of and industry responses to the Department of Labor’s fiduciary rule along with an update of where the rule stands now.
The latest delay of implementation was announced shortly before the Summit, and Campbell believes that the DOL will need an additional 180 days, at minimum, to conduct an accurate and complete review of the proposed rule.
“From a regulatory perspective, Alexander Acosta and his team will need to get to work quickly,” said Campbell. “To perform a full economic analysis in the timeframe that is left in the delay would be fairly ambitious.” Furthermore, he went on to discuss studies that have already been published on the rule, citing adverse effects it is beginning to have on American consumers.
From a regulation perspective, Campbell offered his thoughts on the SEC playing a larger role. “I think we all would prefer that the SEC play a role in the review and implementation process,” said Bradford. “However, a partnership between the two agencies might be the most realistic solution.”
Campbell ended his remarks by encouraging those members present at the 2017 IPASummit, and those who could not attend, to “absolutely put pressure on the current administration to delay the rule for the full 180-day period.”