When it comes to the economy, unfortunately the President hasn’t drained the swamp. Instead, he is filling the government with Wall Street insiders who are now attacking rules put in place to keep big Wall Street banks and predatory lenders from ripping off consumers and prevent another disastrous financial crisis.
“Financial services companies that support giving retirement investors investment advice that is in their best interests should stand up against the aggressive anti-investor lobbying tactics of their trade associations seeking to overturn the Department of Labor’s (DOL) conflict of interest rule, according to three national organizations that have supported DOL efforts to strengthen protections for retirement savers.”
In the new political environment, it is likely that there will be a heavy emphasis on the capital formation mission of the SEC. The IAC should play a critical role in reminding the Commission that investor protection is crucial to stable and effective capital formation. …Improving financial entity disclosures is crucial if we are to improve market discipline for large financial entities and investor discipline for funds.
“If these measures became law, long and painful experience suggests they would cause capital to move from sound and regulated investments into dangerous and unregulated investments. The net effect would be to weaken regulatory oversight, reduce transparency, and generally undermine the regulatory framework that helped make America’s financial markets the deepest, most vibrant markets in the world.”
The Senate will vote today on a resolution to disapprove the Department of Labor’s rule requiring retirement advisers to put their clients’ best interests first. The principal sponsors of the Senate resolution – Johnny Isakson of Georgia, Lamar Alexander of Tennessee and Mike Enzi of Wyoming
“We urge you to reject any such proposal that weakens or delays these crucial protections, whether it is based on H.R. 1090 or a phony Wall Street ‘alternative’ to DOL rules. Instead, you should stand with your hard-working constituents saving for retirement who deserve financial advice that is in their best interest, no matter who provides it.”
“Over the forty years since the existing DOL rule was written, retirement markets have transformed and workers have become overwhelmingly reliant on self-directed savings. Due to the loopholes in the current rule, brokers providing advice on such self-directed savings can easily evade the fiduciary protections that Congress intended to provide to workers saving for their retirement through employment-based plans.”
“This is a huge problem – one that, over time, can easily add up to a difference of tens or even hundreds of thousands of dollars in retirement savings. Under the current rules, some of the financial professionals offering retirement investment advice are legally bound to look out for the best interests of their clients; but other professionals, while perceived as having such a duty and clearly benefiting from the perception, are free to put their own interests first, even if that means saddling their clients with needlessly high fees or inappropriate risks.”
With the rulemaking process moving into its final stages, the Department of Labor received a delivery today of petitions in which more than 230,000 signers call for action to protect Americans against self-serving retirement advice. The signatures were gathered by CREDO Action, MoveOn.org, Americans for Financial Reform, and Public Citizen. Ethel Sprouse, the former Mayor of Cedar Bluff, Alabama, accompanied the petition deliverers and told her story at the event.
“The lead agency for investor protection isn’t a natural target for the party’s liberal wing… But half of all Americans own some form of stock… More important, the securities industry has insinuated itself into more of American life. Individuals and small business increasingly get loans through the capital markets; our 401(k) plans are based on publicly traded investments… ‘We marketized our retirement system, we marketized our banking system, and the SEC is the main securities regulator,’ said Marcus Stanley, policy director for the coalition Americans for Financial Reform.”