Lobbyists Eye Spending Bill As A Way To Thwart Retirement Regs, Advocates Warn
STEVE INSKEEP, HOST:
Workers with retirement accounts may have a stake in this next story. It's a debate over financial regulations, including one that is aimed at protecting retirement accounts. Lawmakers are debating the change very quietly. They are not considering it as a stand-alone piece of legislation in Congress. They are discussing whether to include the change as a rider. That's legislation that gets attached to some bigger bill that simply must pass, in this case, a bill that would avoid a government shutdown. NPR's Chris Arnold reports.
CHRIS ARNOLD, BYLINE: The government needs to pass this spending bill. And at moments like this, lawmakers try to attach some completely unrelated provisions to a big bill. Critics say these are kind of like diseased ticks hitching a ride on a dog.
DENNIS KELLEHER: The government has to be funded for next year, everything from science research to education to health care. And Wall Street's trying to take America's priorities and hold them hostage.
ARNOLD: That's Dennis Kelleher, the president of Better Markets. It's a financial reform nonprofit. He says lobbyists are targeting a rule coming out of the Labor Department. The rule would block financial advisers from charging excessive fees in workers' retirement accounts, which cost average Americans collectively a ton of money.
KELLEHER: The estimates are somewhere between $17 or more a year is being moved from retirement accounts into brokers' pockets.
ARNOLD: The new rule, Kelleher says, would keep that money in workers' pockets. Basically, the rule would require financial advisers to act in their client's best interest. But with so much money on the line, Kelleher's worried that lobbyists will squash this new rule by sneaking in language into this larger bill at the last minute.
KELLEHER: So Wall Street's saying, make sure you slip it in in the middle of the night in this funding bill so that we can kill the Department of Labor best interest rule.
ARNOLD: AARP, organized labor and scores of public interest groups are calling on Congress to protect the Department of Labor rule. But for its part, the industry says all these groups have it wrong.
JULES GAUDREAU: This DOL rule, unless it's modified drastically, imposes a rubric of new regulation hundreds and hundreds of pages long.
ARNOLD: Jules Gaudreau is the president of the National Association of Insurance and Financial Advisors. He says a big unintended consequence, many advisers won't be able to make enough money working with less affluent Americans.
GAUDREAU: It's going to cause most financial advisers to rethink their ability. I mean, they have to support their own practices, their own families and everything like anyone else. It's going to make them rethink their ability and their desire to deal with the small and moderate income investor.
ARNOLD: And so he says many people could lose access to financial advisers. The Obama administration downplays that concern, saying advisers who currently act in their client's best interests will be fine. But the lobbying could be paying off. More Republican and Democratic lawmakers say now that they'd support delaying the new rule, and that might make it hard to implement before President Obama leaves office. Chris Arnold, NPR News. Transcript provided by NPR, Copyright NPR.