Retail Investor Protection Act

Floor Speech

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Mrs. WAGNER. I would like to thank Chairman Hensarling and Subcommittee Chair Garrett for their support on this tremendous issue.

Mr. Speaker, today I am pleased to stand before the House as the sponsor of H.R. 1090, the Retail Investor Protection Act. This important legislation that I have sponsored and worked on for 3 long years now came about after my colleagues on the Financial Services Committee and I, along with Member of Congress on both sides of the aisle saw the potential negative effects that this rulemaking from the Department of Labor could have on millions of Americans seeking advice on how to invest their retirement savings.

For that reason, we felt it was important to put the Securities and Exchange Commission--the primary and expert regulator for these financial professionals--in charge of studying and writing the rules on this issue. This isn't such a radical idea. In fact, this is what Congress intended when they included section 913 in the Dodd-Frank financial reform bill.

Mr. Speaker, the same legislation received the support of 30 House Democrats last Congress, and, once again, I hope that they heed the concerns and the warnings that their constituents have provided them about the dire consequences this rule will have on Americans' retirement savings.

Make no mistake. There is a savings crisis in this country. About half of all households age 55 and over have no retirement savings at all. How does this happen?

Unfortunately, for many people, like that single mother of two who gets paid on the 15th and 30th of each month, there is just too much month at the end of the money after paying for mortgages, groceries, medical bills, and other expenses, and saving for retirement ultimately gets pushed off until the next month and the next month and so on.

For many American households, a trusted financial adviser is the key link to helping them see the benefits in saving early and helping them realize how to save and grow their investment. The vast majority of those financial professionals already provide advice and recommendations that are in the best interest--the best interest--of their clients.

Unfortunately, this rulemaking from the Department of Labor could potentially cut access, limit choice, and raise costs for that kind of financial advice, putting the goal of retirement even further out of reach.

The Department of Labor states that this rule simply would require financial advisers to act in the best interests of their customers. Well, who would argue with that? Unfortunately, when you start to get into the over 1,000 pages of regulatory text with the exemptions and addendums, it becomes clear that it isn't quite that simple.

The increased compliance burdens and further legal liability that will be required under this regulation will make it very difficult for many brokers to continue servicing small accounts, which predominantly belong to low- and middle-income Americans who are just starting to save and haven't built up their retirement nest egg.

Mr. Speaker, 98 percent of all IRAs with less than $25,000 are in a brokerage relationship today. For that reason, this rule will actually hurt the very people that it aims to protect. We must not play politics with their retirement savings, and that is what this administration is doing.

We have already seen this happen in the United Kingdom. They enacted a similar regulation in 2013, and we have seen since then over 300,000 clients dropped by their financial advisers because their account balances were too small.

Now the U.K. Government is launching an investigation into the ``advice gap'' that exists for those people who do not have significant wealth. With this regulation from the Department of Labor, the same thing will happen here in the United States of America where there will be two different classes of investors, those who can afford financial advice and those who cannot.

Mr. Speaker, this is not a Wall Street issue. This is as Main Street as it gets. Washington should not be making it more difficult for Americans to save for retirement. Instead, we need to empower people to earn more and save more and have choices for where to get their help in making their financial decisions. Unfortunately, the Department of Labor is following along with everything else we have seen under the Obama administration, a top-down, Washington-knows-best-for-you government, whether it is what you see in your health care that you need, the food that you can eat, and now whom you can talk to for the financial advice for your retirement savings.

According to President Obama, Senator Elizabeth Warren, and now even Secretary Hillary Clinton--who are all big supporters of this DOL fiduciary rule--the only person whom you actually need to be protected from ultimately is yourself. I strongly disagree. I give the American people a lot more credit than that, and I refuse to stand by and let this administration advance another onerous regulation that ultimately takes your freedoms, makes decisions for you, and brings us closer to a government-planned life.

Mr. Speaker, I strongly support H.R. 1090, the Retail Investor Protection Act, and I urge its passage.

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Mrs. WAGNER. Mr. Speaker, I thank the chairman again for his support and all my colleagues who have come down here to the floor to speak on behalf of those low- and middle-income investors that need good, sound advice when it comes to their financial security and their retirement.

We all agree that every American who is saving for the future deserves to have the very, very best advice based on the needs for their retirement investments and savings for the future.

With all due respect to the gentleman from Massachusetts, what his amendment does is completely flip-flop the Retail Investor Protection Act. It says that the DOL should go ahead of the SEC.

The Department of Labor is completely out of its lane when it comes to this particular matter. It is the Security and Exchange Commission that is absolutely the expert when it comes to promulgating any kind of rule, regulation, or oversight in this area.

We have laws and rules already on the books, through FINRA, through the SEC, to make sure that savers are getting the best advice they possibly can for the future.

It is clear in Dodd-Frank--and I find it almost impossible to believe that the minority thinks that somehow that Section 913 of Dodd-Frank, which says specifically that the SEC should take care of this space, should be promulgating rules and regulations and deciding how to go forward in this space, that somehow they now think that the Department of Labor should be allowed to promulgate, including addendums and exemptions, another thousand-page rule on the American people.

Mr. Speaker, the American people are tired of this ``Washington knows best, top-down government.'' It is wrong. We have heard it from the chairman and others, whether it had to do with food, energy, or health care.

I believe in freedom. I believe in the American people that they can choose their investment advice, their savings advice themselves, and they are entitled to that freedom and to their right.

We do not need another government-promulgated, ``Washington knows best'' rule from the Department of Labor that is going to put access people, choice people, and cost those low- and middle-income investors out of this entire savings retirement future.

So I implore my colleagues to reject the amendment from my colleague, Congressman Lynch, and to support the Retail Investor Protection Act, H.R. 1090.

I thank the chairman for his time and effort and the entire committee and, again, all the colleagues, those who even wanted to come to the floor to speak on this issue because their constituents are so very concerned about their personal retirement savings and freedom.

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