House committee votes to prohibit DOL spending on fiduciary rule

A House committee today approved a budget rider today that would prevent the Department of Labor from spending any funds to implement its fiduciary rule.

The House Appropriations Committee voted 31-25 to send the Fiscal Year 2025 Labor, Health and Human Services, Education, and Related Agencies bill to the House floor. The bill is expected to receive a full House vote in the coming weeks, sources said.

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

That rule package is effectively another stab at a fiduciary standard for most annuity sales. Introduced on Halloween with remarks from President Joe Biden, the fiduciary package faces threats from several places. Starting with a pair of lawsuits filed in Texas.

The original fiduciary rule lawsuit, filed in May in the Eastern District by the Federation of Americans for Consumer Choice, challenged the legality of the DOL rule. A separate case is being heard by the Northern District of Texas challenging the same rule.

In the meantime, in late June the U.S. Supreme Court overturned the Chevron doctrine, potentially sapping the regulating power of government agencies and transferring it to the courts. The widespread ramifications of this decision are likely to impact numerous financial regulatory bodies, including the DOL and its pending fiduciary rule.

Trade associations such as the Insured Retirement Institute have been working all avenues to stop the fiduciary rule package, which takes effect in September.

“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 CEO 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.”

This report compiled by InsuranceNewsNet staff.