Legislation to Overturn Fiduciary Rule Advances Through House Committee

The U.S. House of Representatives’ Education and Workforce Committee voted 23 to 18 on Wednesday to pass a Congressional Review Act resolution to overturn the Department of Labor’s Retirement Security Rule. The bill is sponsored by Representatives Rick Allen, R-Georgia, and Education and the Workforce Committee Chair Virginia Foxx, R-North Carolina.

The Retirement Security Rule, often called the fiduciary rule, was finalized by the DOL in April and scheduled to take effect September 23. It would extend fiduciary duties under the Employee Retirement Income Security Act to one-time recommendations to retirement investors. This would include recommendations historically not covered, such as rollovers, annuity sales and investment menu sales.

If the legislation were to become law, it would nullify the DOL’s rule. A companion bill in the Senate is co-sponsored by Senator Joe Manchin, I-West Virginia, which could give the legislation a probability of passing the Senate, since Republicans widely oppose the Retirement Security Rule. However, it is all but certain to be vetoed by President Joe Biden.

A vote has not yet been scheduled for the full House of Representatives, nor has any vote been scheduled in the Senate.

Separately, the House Appropriations Committee voted 31 to 25 on Wednesday to advance an appropriations bill that would prevent the DOL from using funds to implement the Retirement Security Rule. The proposed budget also contains sharp cuts to the Employee Benefits Security Administration and the Occupational Safety and Health Administration.

The DOL is also currently facing two lawsuits in federal courts challenging the rule, including one filed by several insurance trade groups. The life insurance and asset management industries, by and large, have been staunch opponents of the rule.