House Financial Services Committee Chairman Jeb Hensarling saidhe believes the Securities and Exchange Commission can stop theDepartment of Labor’s fiduciary rule, which could potentially limit familiesfrom obtaining financial advice, during a hearing Wednesday.
Critics of the rule, which would expand thescope of regulations placed on financial advisers, sayitsÂ implementation wouldÂ lead to increasedfees and lower returns on retirement investments for those seekingfinancial advice.
Republican lawmakers called on the SEC to put forthitsÂ own plan in hopes of Â stalling the newregulation, which is strongly supported by the Obamaadministration.
“The SEC has an opportunity to act and stop the LaborDepartment from making financial advice and retirement planningless available and more expensive for Americans with low andmoderate incomes,” Hensarling said. “Real investorprotection comes from innovative capital markets that arevigorously policed for fraud and deception, allow capital formationto flourish, and give investors the freedom to make informedinvestment decisions free from government interference andcontrol.”
SEC Chairwoman Mary Jo White told the panel the agency isworking on a proposal, but wasn’t able to give a timeframe ofwhen it would be released.
Rep.Â David Scott criticized the SECÂ forallowing the DOL to infringe on the authority itÂ wasgiven under Dodd-Frank to analyze the effectiveness of financialregulations and produce a uniform fiduciary rule.
The DOL was not givenÂ that authority,Â butsupporters of the DoLÂ rule say it’s valid becausethe DoL has authority over the Employees Retirement Income SecurityAct.
Scott said the DOL should not be responsible for defining whofalls under the umbrella of financialregulations.Â â€œI want you to make itplain, seize your authority back on this fiduciaryissue,â€ he said.
Hensarling called on the agency to provide the committee with anin-depth economic analysis on how it will affect investors ahead ofits rule proposal.
White said there will be a strong emphasisÂ on makingsure affordable financial advice is available, but it “is along, complex exercise, and it has to involve the fullcommission.”