House Committee Votes to Repeal DOL Fiduciary RuleHouse Committee Votes to Repeal DOL Fiduciary Rule The House Education and Labor Committee has approved a resolution to repeal the Labor Department’s Retirement Security Rule, a new fiduciary rule that has been met with opposition from the financial industry. Background of the Fiduciary Rule The DOL’s Retirement Security Rule, finalized in April, extends fiduciary duties under ERISA to one-time recommendations to pension investors. This includes recommendations such as rollovers and annuity sales. The rule was set to go into effect on September 23. House Committee’s Action The joint resolution of censure was introduced by Rep. Rick Allen (GA), who criticized the Biden administration for “demonstrating its inability to face reality” by finalizing the rule. The resolution is expected to be voted on by the full House next week. Lawsuits Challenging the Rule The DOL’s fiduciary rule faces two lawsuits in federal courts. The Federation of Americans for Consumer Choice challenged the rule’s definition of investment advisory fiduciary, arguing that it is indistinguishable from a previous rule that was overturned in 2018. The Financial Services Institute and Securities Industry and Financial Markets Association joined another lawsuit that seeks to overturn the rule for expanding the definition of fiduciary and jeopardizing investors’ access to advice. Industry Response The Insured Retirement Institute (IRI) supported the House committee’s vote, arguing that the rule would impede consumers’ access to accurate information about retirement products. The financial industry has generally opposed the rule, expressing concerns about increased regulatory burdens and potential harm to investors’ access to advice. Next Steps The House vote is the latest step in a larger effort to overturn the DOL’s fiduciary rule. The resolution will now move to the full House for a vote. If passed, it will go to the Senate for further consideration. The rule is also facing legal challenges, which could further delay its implementation.
The House Education and Labor Committee voted Wednesday to approve a resolution to repeal the Labor Department’s new fiduciary rule, called the Retirement Security Rule.
The House committee’s joint resolution of censure was introduced by Congressman Rick Allen (GA). “The Biden administration has demonstrated its inability to face reality by finalizing such an overly restrictive fiduciary rule that complicates financial planning through excessive regulation,” Allen said.
The DOL’s Retirement Security Rule was finalized in April and was set to go into effect on Sept. 23. It would extend fiduciary duties under the Employee Retirement Income Security Act (ERISA) to one-time recommendations to pension investors. This would include recommendations such as rollovers and annuity sales.
Through the Congressional Review Act (CRA), Congress can review and possibly reject new regulations from federal agencies. Congress also has 60 days to make a collective decision and use the CRA’s “fast track” procedures.
The DOL is also facing two lawsuits in federal courts challenging the fiduciary rule. When the new rule was finalized on April 23, industry observers expected a flurry of lawsuits to follow.
The first legal challenge came a few days later in a lawsuit filed by the Federation of Americans for Consumer Choice, a trade association whose members are independent marketing organizations, insurance agents and agencies that market fixed insurance products, including annuities.
The lawsuit alleged that the DOL’s new definition of investment advisory fiduciary is virtually indistinguishable from the 2026 Fiduciary Rule, which was adopted by the 5e Court of Appeal in 2018.
In early July, the Financial Services Institute and the Securities Industry and Financial Markets Association joined a federal lawsuit filed in May in the Northern District of Texas seeking to overturn a DOL rule that unlawfully expands the definition of a “fiduciary” and jeopardizes investors’ access to advice and education.
The House committee’s vote Wednesday was supported by the Insured Retirement Institute (IRI). “This rule improperly and unnecessarily extends ‘fiduciary’ status to nearly all financial professionals who provide retirement services and imposes significant new barriers that will impede consumers’ access to accurate information about retirement products,” said Wayne Chopus, IRI’s president and CEO.
