The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.
“RETAIL INVESTOR PROTECTION ACT” mentioning the U.S. Dept of Labor was published in the Extensions of Remarks section on pages E1602-E1603 on Oct. 30, 2013.
The publication is reproduced in full below:
RETAIL INVESTOR PROTECTION ACT
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speech of
HON. CAROLYN McCARTHY
of new york
in the house of representatives
Tuesday, October 29, 2013
Mrs. McCARTHY of New York. Mr. Speaker, I rise today in support of H.R. 2374, the Retail Investor Protection Act. As you may know, this legislation would prohibit the Secretary of Labor from finalizing a regulation related to investment advisors until the SEC issues a final rule on the standard and conduct for brokers and dealers of securities. The SEC, under Dodd-Frank, already has been designated with the duty of providing universal standards of conduct for brokers and dealers that are similarly in place for investment advisors.
Quite frankly, Mr. Speaker, I have been disappointed in the Department of Labor's (DOL) efforts to redefine fiduciary duty for the purposes of ERISA. While I have no doubt that the ERISA law needs to be updated, I believe that the Department has not acted in good faith to put out a pragmatic and acceptable rulemaking. I, along with a bipartisan group of my colleagues, was successful in having the DOL withdraw their original rulemaking pertaining to fiduciary status after we raised both financial security concerns on behalf of average consumers and investors and conflicts of intent with the SEC. Unfortunately, since the Department's withdrawal, it has not been amenable to making practical changes going forward.
Over the course of the past couple of years, I have questioned then-
Secretary of Labor Hilda Solis and have met with Employee Benefits Security Administration officials, including Assistant Secretary Phyllis Borzi to get a better handle on the impetus of DOL's efforts. Following those conversations, I can report that, while the Department's intent is in the right place in regard to this rulemaking, its efforts have ultimately been misplaced. For me, concerns remain for the future of low-balance IRA holders who may be orphaned if the DOL abandons the brokerage model in favor of either
``do it yourself'' online tools, that are often times confusing to average investors, or an advisory model, that typically is out of the price range of average consumers and requires a high minimum balance for account holders. Further, questions remain over the extent of the coordination between DOL and the SEC. The letters I've seen between the agencies are superficial in nature and certainly do not give the indication that any substantial conversations have occurred on the issue. Finally, DOL has not quelled the fears of advisors and broker-
dealers that believe that liability concerns might curb access to basic financial information for consumers if a broad fiduciary definition is adopted.
Mr. Speaker, H.R. 2374 is not an ideal bill and I do have reservations about the precedent this legislation may set in regard to the regular order process for agency rulemakings. However, as I noted above, the Department of Labor has not given me full faith that this process is moving forward in a responsible manner, especially given its shared jurisdiction with the SEC.
Especially in these uncertain economic times, this Congress must be focused on incentivizing responsible investment and augmenting access to financial literacy and education. I do not believe these tests have been met successfully thus far by DOL and because of the potentially stifling affect a shortsighted rule may have on the national economy, I will lend my support to the Retail Investor Protection Act.
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