Retail Investor Protection Act

Floor Speech

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Mr. LYNCH. I thank the gentlewoman for yielding.

Mr. Speaker, I rise today in opposition to H.R. 2374, the so-called Retail Investor Protection Act. Despite its innocuous-sounding title, the intent of this bill is not to protect investors, but to protect an outdated system that systematically weakens the average American's retirement savings protections.

When Americans sit down across the table from a financial adviser and entrust their retirement nest egg, they expect the advice they receive to be the best financial advice for them. That is why when Congress created the Employee Retirement Income Security Act in 1974, it did so with the express purpose of protecting employees and their dependents through robust disclosure requirements and fiduciary standards of care.

But the quality of advice they receive is often dependent on whether their adviser is an investment adviser or a broker-dealer, a distinction which is really a reflection of an accident of chance that retail investors typically are not aware of and do not fully understand.

Moreover, as employers have come to back away from defined benefit pension plans to defined contribution plans like 401(k)s, average workers more often are on their own to weigh advice received directly from their financial adviser about how best to invest their retirement. The result is a retirement savings system in which many workers often are unaware that they are turning over their savings to advisers who may have no legal requirement whatever to act in the worker's best interest.

This bill before us today will make it harder for the Department of Labor and the Securities and Exchange Commission to protect workers' retirement savings at a time when expanding and strengthening those retirement savings and protections has never been more important.

The average Social Security beneficiary receives about $1,200 per month, or just under $15,000 per year, representing just 41 percent of required pre-retirement income. With the cost of services for retirees--such as health care, food, and other essentials--continuing to go up, it is more important than ever that Americans have robust retirement savings to supplement the modest benefit that Social Security now guarantees.

Unfortunately, this bill before the House today takes us in the opposite direction in order to protect its status quo. That is why AARP opposes this bill. That is why the AFL-CIO opposes this bill. That is why the Consumer Federation of America opposes this bill. That is why Americans for Financial Reform opposes this bill. That is why I will vote ``no'' on this bill, and I urge my colleagues to do the same.

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