Top News

IRI Board Meets with Congress to Discuss Blueprint Solutions

Last week, representatives from IRI’s Board of Directors met with Members of Congress and their staffs during a two-day virtual “fly-in.” In 28 meetings, the IRI Board of Directors discussed the next steps Congress can take to further strengthen retirement security for America’s workers’ and retirees’. IRI Board Members highlighted the 30 bipartisan, common-sense proposals outlined in the 2021 Retirement Security Blueprint as the solutions that can be used to address the anxiety many workers and retirees are experiencing about their ability to accumulate the savings they need to sustain them during their retirement years. In a statement to the press, IRI President and CEO Wayne Chopus said, “the solutions offered by the Blueprint will help our nation’s workers and retirees build economic equity, strengthen their financial security, and protect their income during their retirement years.” IRI Board Members met with Members of Congress serving on the Senate Finance Committee, Senate Banking Committee, Senate Health, Education, Labor, & Pensions Committee, and the House Committees on Ways and Means, Financial Services, and Education and Labor.

IRI legislative affairs staff is continuing to engage with Capitol Hill to promote the solutions offered in the 2021 Retirement Security Blueprint and advocating for the introduction of a comprehensive, bipartisan retirement security legislation during this session of Congress.

Any questions should be referred to Paul Richman or John Jennings.


DOL Releases Non-Enforcement Policy on its “ESG” and Proxy Voting Rules

Last week, the Department of Labor (DOL) released a non-enforcement policy on its so called “ESG Rule,” formally titled “Financial Factors in Selecting Plan Investments,” as well as for its “Fiduciary Duties Regarding Proxy Voting and Shareholder Rights.”  The DOL’s Employment Benefits Security Administration (EBSA) released the announcement as an enforcement policy statement under Title I of the Employee Retirement Income Security Act of 1974.

Along with the Statement Regarding Enforcement of its Final Rules on ESG Investments and Proxy Voting by Employee Benefit Plans, EBSA issued a related press release. This press release unequivocally set forth “Until the publication of further guidance, the department will not enforce either final rule or otherwise pursue enforcement actions against any plan fiduciary based on a failure to comply with those final rules with respect to an investment, including a Qualified Default Investment Alternative [QDIA], or investment course of action or with respect to an exercise of shareholder rights.”

IRI issued its own press release, expressing its support for the DOL’s non-enforcement policy of the ESG Rule and the closely-related Proxy Voting Rule. IRI worked collaboratively with our sister trades on engaging with EBSA on the necessity of this non-enforcement policy and the need to revisit, revise and possibly withdraw the ESG Rule. Following a listening session with EBSA representatives, the joint trades developed and submitted recommended language to accompany the non-enforcement policy to address and highlight key concerns related to these final rules. The chilling effect of the ESG Rule on the market, along with the recognition of the scope of fiduciaries’ duties under ERISA to act prudently and solely in the interest of plan participants and beneficiaries was clearly reflected in the DOL’s enforcement policy statement.

We welcome any questions, concerns or comments on the DOL’s non-enforcement policy and look forward to engaging with the DOL on next steps as they set forth the intention to revisit these two final rules.

Any questions should be directed to Emily Micale.


Capitol Hill Retirement Champions Added to 20 in 21 Line-Up

IRI is pleased to announce that Senator Ben Cardin (D-MD), Senator Rob Portman (R-OH), Representative Tom Suozzi (D-NY), and Representative Kevin Brady (R-TX) will be joining IRI’s 20 in 21. In their sessions, these leading voices on Capitol Hill will address what steps Congress can take to address retirement security and provide their outlook on pertinent legislation to address the nation’s looming retirement crisis during the 117th Congress. 

Registration for IRI’s 20 in 21 is now open. Click here for more information.


Legislative News

Senate Takes Actions on Biden Nominees

Last week, the Senate Committee on Banking, Housing, and Urban Affairs voted 14-10 to advance to the full Senate the nomination of Gary Gensler to serve as Chair of the Securities and Exchange Commission (SEC). Gensler previously served as the Chairman of the Commodity Futures Trading Commission under President Obama and, more recently, as Chairman of the Maryland Financial Consumer Protection Commission. During his chairmanship, the Maryland Commission recommended the adoption of an expanded definition of fiduciary, which IRI successfully advocated against. A vote in the full Senate has not been scheduled yet. IRI will provide an update once the Senate acts.

The Senate Committee on Health, Education, Labor, and Pensions (HELP) will meet on March 16 at 10:00 a.m. ET for a hearing on the nomination of Julie Su to serve as the Deputy Secretary of Labor. Su currently serves as the Secretary of California Labor and Workforce Development Agency. Prior to her appointment as Secretary, Su was California’s Labor Commissioner and was a civil rights attorney for 17 years. The White House’s announcement of Su highlighted her achievements, stating “Su is a nationally recognized expert on workers’ rights and civil rights who has dedicated her distinguished legal career to advancing justice on behalf of poor and disenfranchised communities, and is a past recipient of a MacArthur Foundation ‘Genius’ grant.” IRI will monitor the hearing and will provide updates on the nomination process as needed.

Any questions should be referred to John Jennings.


Bill Creating Senior Investor Task Force to Pass Out of the House Later Today

Representatives Josh Gottheimer (D-NJ), Trey Hollingsworth (R-IN), Vicente Gonzalez (D-TX), Brian Fitzpatrick (R-PA), and Sean Casten (D-IL) introduced H.R. 1565, the Senior Security Act of 2021. The bill would create an interdivisional task force at the Securities and Exchange Commission (SEC) to examine and report to Congress on the challenges still facing older and vulnerable investors, including financial exploitation and the impacts of cognitive decline. The bill also directs the Government Accountability Office to report on the economic effects of the financial exploitation of older Americans, including associated governmental/private sector costs, numbers of unreported cases, and policy recommendations to respond to this critical issue. IRI sent a letter to the sponsors of the bill stating support for the legislation. The bill is expected to pass out of the House of Representatives later this evening.

Any questions should be referred to John Jennings.


Federal Data Privacy Proposal Introduced in House of Representatives

On March 10, Representative Suzan DelBene introduced the Information Transparency and Personal Data Control Act to create a national data privacy standard. In a press statement, Rep. DelBene said, “Data privacy is a 21 Century issue of civil rights, civil liberties, and human rights and the U.S. has no policy to protect our most sensitive personal information from abuse. With states understandably advancing their own legislation in the absence of federal policy, Congress needs to prioritize creating a strong national standard to protect all Americans. This bill will create those critical protections.” The bill would cover sensitive personal information including “financial, health, genetic, biometric, geolocational, sexual orientation, citizenship/immigration status, Social Security Numbers, and religious beliefs,” according to a fact sheet. To accomplish this, the bill would require companies to provide “plain English” privacy policies, allow users to “opt-in” to the use of their information, require disclosures of how personal information is used and distributed, and require third-party “privacy hygiene” audits every two years. The bill would preempt the growing patchwork of state data privacy laws and empower the Federal Trade Commission and the states’ Attorneys General to enforce these standards.

IRI will continue to monitor for actions to advance data privacy standards.

Any questions should be referred to John Jennings.


Racial Equality the Subject of House Financial Services Hearing

On March 10, the House Committee on Financial Services held a hearing entitled “Justice for All: Achieving Racial Equality Through Fair Access to Housing and Financial Services” to focus on “solutions that remove barriers and replace them with real opportunities that create equity for people and communities of color in the financial services industry and beyond.” Concurrent with the hearing, members of the committee introduced 26 pieces of legislation. Committee Chairwoman Maxine Waters (D-CA) commented on the number of legislative solutions in her opening statement, saying, “I am very pleased that Members of the Committee are putting forth legislation that taken together would make our housing and financial systems fairer and more equitable, including by providing down payment assistance for first-generation homebuyers; strengthening minority lending institutions; and requiring diverse candidate slates for senior positions. I look forward to discussing these and other measures today.” Providing testimony at the hearing were Paulina Gonzalez-Brito, Executive Director, California Reinvestment Coalition; Rashad Robinson, President, Color of Change; Nikitra Bailey, Executive Vice President, Center for Responsible Lending; John Yang, President & Executive Director, Asian Americans Advancing Justice; and, Ian Rowe, President & Co-Founder, Vertex Partnership Academies.

IRI continues to monitor Congress for proposals to advance diversity, equity, and inclusion initiatives.

Any questions should be referred to John Jennings.


Bill Introduced to Require Climate and Clean Energy Disclosures

A bill introduced by Representative Nydia Velazquez (D-NY) last week, the Paris Climate Agreement Disclosures Act, would require the SEC to issue a rule requiring annual shareholder reports include actions being taken by public companies to meet “the greenhouse gas emissions targets and temperature goals set forth in the Paris Climate Accord.” In a press statement announcing the bill, Representative Velazquez said, “We are already seeing the markets become more and more favorable towards clean energy, but currently, investors do not have all the tools they need to make climate-forward decisions. This bill will require publicly-traded companies to disclose what they are doing or not doing to reduce greenhouse gas emissions so that investors can make better-informed decisions about where to put their money.”

IRI continues to monitor Congress for proposals related to ESG investments and disclosures.

Any questions should be referred to John Jennings.


Idaho Standard of Conduct Legislation Awaits Governor’s Signature

Idaho H.79, updating the suitability in annuity standards, passed out of the state’s legislature last week and was submitted to Governor Brad Little (R-ID) for his signature. IRI supported the legislation and submitted a letter to the Chair of the Senate Commerce & Human Resources Committee calling for its enactment. The bill goes into effect on July 1, 2021. IRI will work with the Department of Insurance on the implementation of the new standards as well as the section addressing the 2020 annuity disclosure form provisions.

Any questions should be referred to Jason Berkowitz.


Regulatory News

DOL Announces Withdrawal of its Independent Contractor Rule

On March 11, the DOL announced proposals to rescind two final rules that would significantly weaken protections afforded to American workers under the Fair Labor Standards Act.

The first Notice of Proposed Rulemaking proposes the withdrawal of the Independent Contractor Final Rule issued by the department on issued on January 7, 2021, for several reasons. They included the following:

  • The rule adopted a new “economic reality” test to determine whether a worker is an employee or an independent contractor under the FLSA.
  • Courts and the department have not used the new economic reality test, and FLSA text or longstanding case law does not support the test.
  • The rule would narrow or minimize other factors considered by courts traditionally; making the economic test less likely to establish that a worker is an employee under the FLSA.

IRI had signed on to a joint trades letter, along with FSI, SIFMA, and the American Securities Association, generally supporting the then-proposed Independent Contractor Rule, as it would provide greater clarity and certainty for independent contractors and promote consistency.

The joint trades comment letter focused on the DOL’s need to provide further clarity, specifically regarding application of the control element of the economic reality test to the financial services sector. Now, the DOL has invited comments from the public on both proposed rules at The comment periods end on April 12, 2021.

Any questions should be referred to Emily Micale.


MRSB Seeks Comments on Reg BI Requirements for Bank Dealers

In a Notice and Request for Comment on Application filed on March 4, the MSRB asked for comment on proposed changes to its Rule G-19 on suitability, to extend the requirements of the SEC’s Reg BI to bank dealers. Bank dealers are not covered by the SEC’s Reg BI standards. The change would affect 21 bank dealers registered with the MSRB.

However, the differences in standards between broker-dealers and bank dealers is a concern, per the MSRB Notice.

“The MSRB is concerned that this difference could cause unintentional harms and confusion to retail investors in the municipal securities market and is issuing this request for comment for further input from market participants,” the MSRB said.

While bank dealers make up just a small portion of the municipal space, over 1,200 dealers registered with the MSRB, only 21 firms are registered as bank dealers. Those 21 bank dealers conducted only 1.5% of all retail sized dealer-to-customer trades in 2019, the MSRB said.

MRSB has noted comments on this Notice are due June 2, 2021. IRI is currently evaluating the effect of the Notice and seeking members’ initial impressions on how this may impact our IRI members, or how it may relate to our members advocacy priorities with respect to Reg BI.

Any questions should be referred to Emily Micale.


FINRA Provides Guidance on Discounts and Waivers for Investment Company Products

On March 4, FINRA issued new Guidance to investment companies who provide sales charge discounts and waivers on certain products for customers, in particular circumstances, as described in the company’s product-related documents. Such documents would include prospectuses or statements of additional information.

FINRA Regulatory Notice 21-07, sets forth that a company’s failure to apply these discounts or waivers correctly may adversely affect customers’ rates of return on their investment and contravenes firms’ obligations under FINRA rules.

While FINRA acknowledges this Guidance does not create new legal or regulatory requirements or new interpretations of existing requirements, FINRA provided its rationale Regulatory Notice 21-07 as follows:

  • To remind firms of their obligation to understand and, as appropriate, apply sales charge discounts and waivers for eligible customers;
  • To provide an overview of common sales charge discounts and waivers;
  • To share frequently observed findings in examinations and enforcement matters; and
  • To note considerations firms should review to improve their compliance programs.

Much more detail on FINRA’s guidance, findings, and recommendations on firm’s obligations regarding such discounts and waivers can be found within the Notice itself. While FINRA has not solicited comments on this Guidance, FINRA staff welcomes questions from members.

Any questions should be referred to Emily Micale.