Writing for Morning Consult, ATR President Grover Norquist calls for action against Obama’s executive and regulatory overreach, specifically overreach regarding the fiduciary rule.
As Norquist notes, the Department of Labor does not have enforcement and examination authority to push forward the fiduciary rule. Instead, jurisdiction over the issue resides with the Securities and Exchange Commission.
This means that there are severe problems with the DoL fiduciary rule as written. As Norquist notes:
“The rule creates a “best interest” standard of conduct that investment advisors must meet when representing the interests of their clients. While there is broad agreement amongst industry groups and consumers that such a standard should exist, the mandates associated with the existing rule are so broad and lack clarity that they are open to wide interpretation. Some economists have even warned the standard is an “open-ended obligation with seemingly no bounds.”
The costs of this regulatory overreach will not be significant and have astounding effects on retirement savings. As Norquist notes:
“Although there has been no official in-depth analysis of the rule, some have predicted it may result in up to 7 million IRA holders being priced out of investment advice and result in 300,000 to 400,000 fewer IRAs being opened every year. All told, some fear this regulation could result in more than $80 billion in lost savings.”
A lawsuit by several business groups in Texas was recently filed in an effort to block the fiduciary rule. As Norquist notes, this is the latest effort to stop the rule following multiple efforts by conservative in Congress to block the rule. Indeed, conservatives should have no hesitation supporting this latest effort:
“The ill-conceived rule must be repealed or struck down. Leaders in Congress have already worked tirelessly for years to stop the fiduciary rule and ensure a common-sense standard is implemented, but these efforts have yielded few results. Given this failure, conservatives should continue fighting any efforts to stop Obama’s regulatory overreach. Lawsuits like the one brought forward by industry leaders to block the fiduciary rule should be vigorously supported as an alternative, and possibly last chance to stop this crushing new set of regulations.”