Today, the SEC finalized a rule that will allow financial professionals to claim they are required to act in investors’ best interests. But “Regulation Best Interest” falls far short of what ordinary investors need to ensure they don’t fall prey to self-interested advice.
Following the SEC meeting, Americans for Financial Reform will host a conference call with guest SEC Commissioner Robert Jackson. AFR and other groups have criticized the commission’s plan on investment advice for leaving ordinary Americans vulnerable to harmful industry practices. The call will include the AFL-CIO, AARP, and the Consumer Federation of America.
Today’s hearing addresses the financial stability and economic risks of the growth of leveraged lending to non-financial businesses. The rapid growth and poor underwriting of high-risk corporate debt is clearly a significant current threat to financial and economic stability.
24-Group Organizational letter on the need to collect data on Opportunity Zone tax break that could reduce affordable housing options, displacing lower-income families of color.
AFR Education Fund comment on the need to collect data on Opportunity Zone tax break that could reduce affordable housing options, displacing lower-income families of color.
Letter to HUD asking for delay of ANPR until note sale data is released
Do not be deceived by the label. The so-called “best interest” standard doesn’t require brokers to do what’s best for their customers. It will not require them to recommend the investments they reasonably believe are the best match for the customer, and it will not require them to consider costs except when comparing otherwise identical securities. That’s why state securities regulators have warned that the proposal “subverts,” rather than protects, investors’ best interests.
“An effective consumer financial protection agency saves families billions of dollars a year, and makes their economic lives more secure. It fights lending discrimination, and shuts down tricks and traps” said Lisa Donner, executive director of Americans for Financial Reform. “Unfortunately, the evidence keeps piling up that the current leadership at the agency is focused on rolling back protections and enabling bad financial actors to rip people off. It is so important that members of Congress continue pressing the CFPB to live up to its consumer protection mandate and fulfill its basic responsibilities, as the House has in passing the Consumers First Act today.”
As part of the Fair Arbitration Now (FAN) coalition, AFR sent a letter in support of Rep. Green’s amendment to the Consumers First Act, which would restore the Consumer Financial Protection Bureau’s arbitration rule that was repeated by a Congressional Review Act resolution in 2017.
On Wednesday, Senator Sanders (I-VT) and Representative Lee (D-CA) introduced the Inclusive Prosperity Act, a bill that would impose a sales tax of 50 cents, 10 cents, and 1/2 a cent per $100 on each trade of stock, bonds and derivatives respectively.