USA Herald (February 15, 2024) By Rihem Akkouche
In a fiery House subcommittee hearing, Republican lawmakers fiercely criticized the U.S. Department of Labor‘s (DOL) proposal to broaden the scope of investment advisers subject to the strict conflict-of-interest standards of the Employee Retirement Income Security Act (ERISA). Amidst heated exchanges, Rep. Bob Good, R-Va., chairing the House Education and Workforce Committee’s health, employment, labor, and pensions subcommittee, led the charge against what he termed “regulatory overreach” by the Biden administration.
Republicans Denounce Regulatory Overreach
Rep. Good urged the DOL to withdraw the Oct. 31 proposal, highlighting its striking resemblance to a previous attempt that was struck down by the Fifth Circuit. The proposal’s similarity and the DOL’s refusal to extend the comment period sparked outcry among panel Republicans, including Rep. Rick W. Allen, R-Ga., who vowed to introduce a joint resolution to repeal the regulation once finalized.
House GOP vs DOL ERISA : Industry Backlash and Criticism
The DOL’s fiduciary proposal drew sharp criticism from industry figures, with Jason Berkowitz of the Insured Retirement Institute labeling it a “disaster.” Testimonies from other witnesses, including Thomas Roberts and Iowa Insurance Commissioner Doug Ommen, underscored industry concerns over the lack of engagement with state insurance commissioners and the redundancy of additional regulations given existing federal and state frameworks.
Democrats Defend Proposal, Stress Regulatory Need
In a counterpoint to Republican criticism, Democratic members, such as Reps. Joe Courtney, D-Conn., and Kathy E. Manning, D-N.C., defended the necessity of federal oversight. Joseph C. Peiffer, representing the Public Investors Advocate Bar Association, noted the DOL’s efforts to refine the proposal based on feedback, emphasizing its targeted approach compared to prior iterations.
DOL’s Response and Industry Consensus
Despite the fervent debate, the DOL remained silent on the proceedings. However, the National Association of Insurance Commissioners (NAIC) echoed Ommen’s concerns, emphasizing the need for meaningful dialogue and collaboration in regulatory efforts. The NAIC’s critique echoed sentiments that the DOL’s engagement lacked depth and failed to fully integrate state perspectives.
House GOP vs DOL ERISA : Looking Ahead
As tensions mount over the DOL’s proposed expansion of ERISA’s fiduciary standards, the clash between regulatory ambition and industry pushback shows no signs of abating. With both sides entrenched in their positions, the fate of the proposal hangs in the balance, promising continued drama and uncertainty in the regulatory landscape.