Earlier this week, House Democrats mounted a strong stand against legislation from Rep. Ann Wagner (R-MO) aimed at killing the Department of Labor's conflict of interest rule by subjecting it to indefinite delays. In what was hailed as a major victory for retirement savers, only three Democrats supported the Wagner bill, down significantly from the 30 Democrats who voted in favor of the bill when it previously came up for a vote.
In a dramatic show of support Democrats, including some former rule opponents, took to the House floor proclaiming that the Department of Labor should be allowed to move forward without delay with its proposal to require all financial professionals to put their customers' interests first when providing retirement investment advice. Member after Member noted the extraordinary outreach the Department has undertaken in its efforts to get the rule right, the serious attention it is giving to the concerns of all stakeholders, and the strong assurances Labor officials from the Secretary on down have provided that the final rule will take that input into account.
Now some of the same House Democrats who helped to lead the fight against the Wagner bill pose the most pressing immediate threat to the conflict of interest rule's survival. Indeed, even as he stood in the spotlight proclaiming his support for the Department's rule before the Rules Committee and then on the House floor, Rep. Jared Polis (D-CO) was preparing and circulating a letter to colleagues that has the very real potential to disrupt and derail the rulemaking process.
The letter for which Rep. Polis and others were seeking co-signers urges the Department of Labor, once it has decided on the specific changes it plans to make to the conflict of interest rule, to provide an additional 15- to 30-day comment period. This on a rule that has already been the subject of repeated rounds of comment and revision over the past five years. In a display of either breathtaking naïveté or stunning cynicism, the letter's authors maintain that the Department can provide this additional comment opportunity and still meet its goal of finalizing the rule before the end of this Administration.
It is difficult to believe that anyone who has witnessed industry's relentless and deceptive attacks on the rule actually believes this is a benign effort that would strengthen DOL's hand. What is incontestable is that the leading industry opponents of the rule - groups like the Securities Industry Financial Markets Association that will be satisfied with nothing short of killing the rule - are very enthusiastic about the letter. Knowing that delay offers their best chance of derailing this rule, they've wasted no time in calling and emailing Members urging them to sign on.
With millions of dollars being spent to defeat it, the Department of Labor's conflict of interest rule is hanging by a thread. The slightest disruption to the rulemaking process will ensure its demise. Whatever its intent, this letter could result in that disruption. No Member of Congress who is sincere about wanting the Department to finalize this rule should associate him- or herself with this effort.