UPDATE — The following story has been updated to include that Democratic Rep. Derek Kilmer also voted “yes” on HR 2374.
WASHINGTON, D.C. (Oct. 30, 2013) — The House of Representatives on Tuesday approved labor-opposed legislation pushed by Wall Street banks that would make it harder for the Department of Labor to approve regulations protecting workers’ interests in how their retirement savings are invested. And three Democratic Congressmen from Washington state were among just 30 Democrats who voted for the Republican-sponsored measure, which passed 254-166.
Reps. Denny Heck (D-10th), Derek Kilmer (D-6th) and Rick Larsen (D-2nd) all voted to approve HR 2374 the so-called Retail Investors Protection Act, which The New York Times called “part of a broader campaign in the House, among Republicans and business-friendly Democrats, to roll back elements of the 2010 Dodd-Frank Act, the most comprehensive regulatory overhaul since the Depression.”
In a letter to members of Congress urging their opposition to HR 2374, the AFL-CIO called the legislation “an ill-disguised attempt to thwart two important rulemakings, the effect of which will be to allow the continuation of financial practices that harm American workers and undermine their retirement security.”
This bill affects all workers who are trying to save for their retirement. The primary way most working people invest in the capital markets is with their retirement savings — frequently their biggest financial asset. They are counting on making the most of their money when they seek investment advice; they are counting on that advice being free from conflicts of interest. That is what is at stake here.
The protections being developed by the DOL are long overdue. While ERISA’s fiduciary rules are intended to protect workers’ retirement savings from fraudulent, deceptive, and misleading practices, the Department’s rulemaking has not kept pace with the dramatic changes in the retirement income landscape over the past four decades. There are critical gaps in the current rules that must be addressed.
The New York Times reports that the bill “stands little chance of becoming law, having received a much chillier reception in the Senate and at the White House.”
But simply voting on the bills generates benefits for both House lawmakers and Wall Street lobbyists, critics say. For lawmakers, it comes in the form of hundreds of thousands of dollars in campaign contributions. The banks, meanwhile, welcome the bills as a warning to regulatory agencies that they should tread carefully when drawing up new rules.
For more information on the bill, check out the Forbes magazine column: Main Street investor protection shut down in ‘retail’ act.