Beltway lawmakers seek a Congressional block on DOL fiduciary rule

A pair of resolutions filed today -- one in the House, one in the Senate – seek to preempt the Department of Labor Retirement Security Rule and its fiduciary duty.

The resolutions were filed under the Congressional Review Act authority, which provides Congress with special procedures, in the form of a joint resolution of disapproval, under which to consider legislation to overturn rules.

"The Biden administration’s latest executive overreach would make it harder for working families to invest and prepare for their financial future," said Sen. Ted Budd, R-N.C. "Consumers would lose access to financial advice, reduce the number of financial management options, and throw a would-be retiree’s financial security into uncertainty. That’s why I am proud to lead the Senate’s bipartisan CRA to overturn this dangerous new regulation, and look forward to it receiving a vote on the floor."

The resolution could pass the tightly divided House and Senate, but would surely be vetoed by President Joe Biden.

The RSR would expose most annuity sales to a fiduciary standard and increase liability for insurers and others in the distribution chain. Introduced on Halloween, the DOL pushed the rule through and will begin enforcing a portion of the new standards on Sept. 23.

A lawsuit challenging the rule is ongoing in the Texas federal court, where a Trump-appointed judge will consider a request for an injunction.

'Significant hardships'

The Insured Retirement Institute (IRI) supports the resolutions.

"The final rule creates significant hardships for today's workers and retirees, making it much more expensive and complicated – and for many consumers, impossible – to access reliable professional guidance," said Wayne Chopus, president and CEO of IRI.

Rep. Rick Allen, R-Ga, is sponsoring the House CRA resolution. Sen. Budd, Sen. Joe Manchin, D-W.Va., Sen. Bill Cassidy, R-La., and Sen. Roger Marshall, R-Kan., are sponsoring the Senate CRA measure.

The CRA was enacted as part of the Small Business Regulatory Enforcement Fairness Act in 1996.

Prior to 2017, the CRA had been successfully invoked only once to overturn a rule. In January 2017, President Donald Trump and the Republican-controlled 115th Congress began passing a series of disapproval resolutions to overturn a variety of rules issued under the Obama administration.

Fourteen such resolutions repealing Obama administration rules were passed and signed into law; a fifteenth resolution was passed by the House but failed in the Senate.

InsuranceNewsNet Senior Editor John Hilton covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.

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InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at [email protected]. Follow him on Twitter @INNJohnH.