If the House of Representatives gets its way, President Barack Obama won't be able to crack down on unnecessary fees that cost Americans billions of dollars in retirement savings a year.
The House voted 234 to 188 Thursday to undo a rule proposed by the Labor Department earlier this month that would require anyone getting paid to provide retirement investment advice to act in the best interest of retirees. Many people think that's already how things work, but it isn't.
The way things work right now is that brokers who oversee retirement savings accounts can be paid extra to steer their clients into unnecessarily expensive funds or excessively risky investments, without disclosing that fact to their clients. That sort of conflicted investment advice costs Americans saving for retirement $17 billion a year, according to the White House Council of Economic Advisers.
To remedy the situation, the Obama administration proposed a fiduciary rule to keep Wall Street from taking so much money in fees from retirement accounts. The financial industry has opposed the rule from the start, saying it will raise costs and limit the advice investors can receive.
Legislators have tried to undercut the proposed rule, which is currently being reviewed by the Office of Management and Budget, for some time. In December, there was a push, which ultimately failed, to include language neutering the rule in the massive omnibus spending bill. And in October 2015, the House passed a similar bill to the one passed Thursday. Three such measures have been introduced in the Senate.
Fortunately for those worried about how this could affect savings, it's likely that Obama would veto any bill rejecting the fiduciary rule that made it through the House and Senate.