Washington, D.C. (October 27, 2015) — Today, Congressman Elijah E. Cummings (D-MD) spoke (link is external) on the House floor in opposition to H.R. 1090, the Retail Investor Protection Act. The bill would prevent the Department of Labor (DOL) from finalizing the fiduciary rule needed to ensure that investment advisors and brokers place the financial interest of their clients ahead of their own.
“…This Act would prevent the Department of Labor from finalizing a rule to establish a fiduciary standard for investment advisors until the Securities and Exchange Commission finalizes a rule first,” Congressman Cummings said. “In essence, the bill before us would prevent the Labor Department from finalizing any rule at all.”
In March, Security and Exchange Commission (SEC) Chairman Mary Jo White said (link is external) it was her “personal view” that the agency should establish its own fiduciary rule, however, the agency still has not proposed a rule.
Cummings cited a DOL study (link is external), released in April of this year, that found that Americans could lose more than $430 billion over the next 10 years without the rule.
In March, Cummings and Senator Elizabeth Warren (D-MA) hosted a forum—as part of their Middle Class Prosperity Project—that examined the loopholes used by advisors and brokers who profit from selling lousy products to their customers.
The bill is opposed by dozens of organizations, including the AFL-CIO, the National Active and Retired Federal Employees Association, the Financial Planning Coalition and the Consumer Federation of America.
The video of the Congressman's remarks can be viewed here (link is external).
Below are Cummings’s remarks, as prepared for delivery:
Thank you, Ranking Member Waters, for yielding me time and for your leadership on this issue.
I rise today to oppose H.R. 1090, the so-called “Retail Investor Protection Act” which is anything but a protection for investors.
Rather than protecting our constituents’ investments, this Act would prevent the Department of Labor from finalizing a rule to establish a fiduciary standard for investment advisors until the Securities and Exchange Commission (SEC) finalizes a rule first.
In essence, the bill before us would prevent the Labor Department from finalizing any rule at all. The Administration has already indicated it would veto this measure if it passed the Congress.
This past March, Senator Warren and I held a forum as part of our Middle Class Prosperity Project to consider the need for a strong fiduciary standard to protect Americans saving for retirement. We heard directly from Americans who had lost tens of thousands of dollars because they did not receive advice that was in their best interests.
In some cases, people may not even realize they have placed their trust in advisors who are not fiduciaries and have no obligation to act in their best interest.
One study found that Americans saving for retirement lose more than $43 billion on average each year because advisors don’t act in their clients’ best interests.
The real solution, as we learned in our forum, is to have a strong Conflict of Interest rule to ensure the advice Americans receive – advice they receive as paying customers – directs their hard-earned retirement savings to investments that will work best for them.
This House should not put roadblocks in the way of this common sense reform. I urge Members to oppose H.R. 1090.
