It will be a slow week in Washington. The House is on recess. The Senate continues work on a bill to address opioid abuse. President Obama talks financial reform with regulators as the Administration prepares regulations that the House has vowed to stop.
President Obama meets Monday with regulators, ahead of the anticipated release of the controversial "Fiduciary Rule." The rule requires brokers to take the best interests of their clients into account when recommending investments and require them to sign a “best-interest” contract with investors to disclose fees or incentives that could influence their recommendations (Source: Bloomberg).
According to the White House Council of Economic Advisers, investors lose more than $17 billion per year due to "conflicted investment advice." The report contends that brokers are influenced by financial incentives to recommend certain kinds of investments that may not carry the highest potential returns but result in larger fees or commissions. The financial industry has spent millions on intense lobbying and is preparing to oppose the rule.
Opponents of the regulation say that it would increase regulatory costs and discourage financial firms from taking on lower-income clients. Rep. Ann Wagner [R, MO-2] said the rule "could potentially cut access, limit choice and raise costs for that kind of financial advice, putting the goal of retirement even further out of reach." Last year, a bipartisan group in the House released a series of principles for revising the fiduciary rule and protecting investors. The House has passed a bill from Rep. Wagner to delay implementation of the rule (H.R. 1090), and is expected to take additional action once the rule is released.
H.R. 1090: RETAIL INVESTOR PROTECTION ACT
Sponsor: Rep. Ann Wagner [R, MO-2]
passed House October 27, 2015
The bill requires the Department of Labor to wait for the SEC's action regarding the fiduciary rule and requires the FEC to submit a report on alternatives to Congress before promulgating its rule.
H.R. 4294: STRENGTHENING ACCESS TO VALUABLE EDUCATION AND RETIREMENT SUPPORT (SAVERS) ACT
Introduced in the House on Dec 18, 2015 BIPARTISAN
Sponsor: Rep. Peter Roskam [R, IL-6]
S. 2505: STRENGTHENING ACCESS TO VALUABLE EDUCATION AND RETIREMENT SUPPORT (SAVERS) ACT
Introduced in the Senate on Feb 4, 2016
Sponsor: Sen. Mark Kirk [R, IL
The SAVERS Act "[expands and strengthens] the definition of a fiduciary and requiring investment advisors to always act in the best interests of their clients when providing investment advice. The legislation creates a new, enforceable best interest requirement, significantly strengthening current legal protections for retirement savers," according to its sponsors.
H.R. 4293: AFFORDABLE RETIREMENT ADVICE PROTECTION ACT
Sponsor: Rep. David Roe [R, TN-1]
Changes the federal statute — The Employee Retirement Income Security Act (ERISA) — to mirror the SAVERS Act language.
Continued work in the Senate on Opioid Bill
The bill authorizes almost $80 million in annual funding to address the nation's opioid crisis. At 5:30 PM on Monday, the Senate will hold a cloture vote to proceed.
The Comprehensive Addiction and Recovery Act (CARA) would be the most expansive federal, bipartisan legislation to date for addiction support services.
The bill includes provisions to:
- Expand the availability of naloxone to law enforcement agencies and other responders to help in the reversal of overdoses
- Expand disposal sites for unwanted prescription medicines
- Launch an evidence-based opioid and heroin treatment and intervention program to promote best practices throughout the country
- Increase resources to identify and treat incarcerated individuals suffering from addiction disorders
- Launch medication assisted treatment and intervention demonstration program
- Strengthen prescription drug monitoring programs
(Read more from POPVOX about CARA)