GOP bill aims to block financial adviser regs

Rep. Ann Wagner (R-Mo.) introduced legislation Wednesday to delay regulations — championed by President Obama and Sen. Elizabeth Warren (D-Mass.) — that would crack down on financial advisers.

Wagner criticized Warren and Obama in an interview with The Hill, saying the regulations, known as “fiduciary standards,” would limit financial advice for low-income Americans who need it the most.

“They will be completely costed out of the market,” Wagner said. “For Elizabeth Warren to limit this in such a way is wrong. … It’s so the Warren, Washington, White House way: top down, ‘We know what’s best. We’re here from the government to save you from yourself.’ “

The administration and Warren say that the new regulations are needed to protect consumers from financial advisers who sell faulty advice to earn commissions from banks.

Labor Department officials sent the proposal to the Office of Management and Budget earlier this week.

Republicans and moderate Democrats argue that the proposal would so radically change the industry’s payment structure that financial advisers wouldn’t have an incentive to serve low-income accounts, which are less lucrative that more wealthy accounts.

“We do have a savings crisis in this nation, and to limit any kind of access and choice is outrageous,” Wagner said. Wagner’s legislation would require that the Securities and Exchange Commission (SEC) act first in issuing any type of fiduciary regulation. Labor Department officials have argued that their agency and the SEC have separate regulatory jurisdictions on the issue.

Obama and Warren called for the new regulations during an appearance Monday at AARP’s offices in Washington. AARP, the AFL-CIO and progressive groups are fighting for the regulations, which the business community opposes.

“It’s about time to do something that we should’ve done long ago — to end the kickbacks, the free vacations and the fancy cars … to ensure that all of our retirement advisers and not just some of them are looking out for the people they serve,” Warren said at AARP on Monday.

Wagner told The Hill financial advisers should be outraged about how Warren has portrayed their industry.

“It’s a Washington regulation, not a Wall Street regulation. This is the Warren way: ‘She knows best,’ ” Wagner said. “Financial advisers and broker dealers have been absolutely slurred by Elizabeth Warren and this White House.”

Wagner introduced a similar bill last Congress. It passed 254-166, with 30 Democrats supporting it despite White House officials saying they would recommend Obama veto it if it reached his desk. The Senate, then controlled by Democrats, did not take up the bill.

Wagner said she will work to get co-sponsors on the bill this week and that she wanted to introduce it in response to Obama and Warren’s AARP event on Monday.

“What fries me the most about this is that I care deeply about those low- and moderate-income investors that are going to those storefront advisers for help and information. They will not have that access if this rule passes,” Wagner said.