The Labor Department is allowing additional time for comment on the agency’s controversial proposed regulations aimed at self-serving financial advisers.
After facing bipartisan congressional backlash on the proposal, the agency is extending the public comment period for the so-called fiduciary rule by 15 days.
The 75-day comment period now brings the total to 90 days after moderate Democrats and Republicans in both chambers criticized the original comment period window, according to a DOL letter sent to congressional staff first obtained by The Hill.
{mosads}”The Department is extending the initial comment period for 15 days, which will mean the opportunity for public comments on this proposal may be over 140 days,” DOL senior legislative officer Michelle Rose wrote in the letter.
In April, DOL officials proposed increasing disclosure requirements for financial advisers, which they say will help consumers understand more clearly how their financial advisers get paid.
The administration, as well as progressives like Sen. Elizabeth Warren (D-Mass.), have raised concerns that financial advisers can place their own financial interests above their clients.
Supporters of the regulations argue that the new rules are needed so that financial advisers can’t sell faulty financial advice while profiting off commissions from the banks for peddling their portfolios.
But moderate Democrats and Republicans — backed by the business community — argue that the new regulations would end up costing out low-income Americans from receiving financial advice.
Critics of the regulatory proposal argue that the new regs aren’t needed and that the new rules would create compliance headaches and confusion for consumers, who might need to get separate advisers for retirement and investment accounts.
“As a representative of an economically depressed district, I am deeply concerned about low- and moderate-income investors’ ability to receive the financial advice they need to save for a secure retirement,” said Rep. Frederica Wilson (D-Fla.) in a statement.
Sen. Jon Tester (D-Mont.) had also circulated a letter included eight Senate Democrats urging a 45-day extension. Meanwhile, 36 Republican senators signed a letter circulated by Sen. Lamar Alexander (R-Tenn.) urging for a 45-day extension.
Wilson said that she is “pleased the Department of Labor has taken our recommendation to extend the comment period for the proposed fiduciary rule.”
“While not the 45 days initially requested, the additional 15 days will give stakeholders more time to provide the comprehensive comments the Department needs to issue a final rule that protects all investors,” Wilson said.
“The potential impact to low-income investors is too great for us to give stakeholders too little time to respond to this rule,” she added.
Rose wrote in her letter that after the comment period, there will be a public hearing with even more time to comment.
Rep. Ann Wagner (R-Mo.) said she was “disappointed” that DOL officials didn’t extend the deadline to the requested 45 days for a rule she said “will have such a consequential impact on millions of low- and middle-income Americans’ ability to seek financial advice for their investments.”
“Unfortunately, the Department of Labor has ultimately ignored that commonsense request,” Wagner said.
Francis Creighton, Financial Services Roundtable executive vice president of government relations, said that DOL officials have said “on multiple occasions they want a thoughtful response on a thousand page rule-making they spent four years devising.”
“While we appreciate the extra two weeks, federal regulators should further extend the comment period,” Creighton said.
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