Senior Editor, Digital Content, U.S. Chamber of Commerce
June 02, 2017
Like an actor in a rubber monster suit stomping on a city in a cheesy Saturday afternoon TV movie, the Labor Department’s impending fiduciary rule, limiting access to retirement investment advice for small businesses and their workers, tramples over the rule of law, attorney Eugene Scalia writes in The Wall Street Journal:
But it doesn’t stop there. The Labor Department created a “new grounds for people to sue,” when the Supreme Court has ruled that only Congress can do that. In addition, Scalia also points out the rule also attacks arbitration, a useful alternative to long, drawn-out court cases:
As ugly as the rule’s “sweeping assault on the rule of law,” are the harms small retirement savers will endure from it. A Center for Capital Markets Competitiveness report that collected and analyzed data from public submissions to the Labor Department found:
- 7 million IRA holders could lose access to investment advice.
- Service fees could rise 200%. Over the next 10 years this would cost investors $109 billion.
- 11 million households could find themselves with fewer retirement investment options.
Now, the SEC is getting into the act and is accepting comments to discern a path forward. This is significant as the SEC is the agency charged with overseeing investment advisors and broker-dealers. Former Labor Secretary Tom Perez went through contortions to create this regulatory Godzilla. Who knows, maybe SEC Chair Jay Clayton will find a new weapon to conquer this monstrosity.
About the authors
Sean writes about public policies affecting businesses including energy, health care, and regulations. When not battling those making it harder for free enterprise to succeed, he raves about all things Wisconsin (his home state) and religiously follows the Green Bay Packers.