The Department of Labor’s (DOL) decision to try again to advance a new fiduciary proposal will hurt working families’ ability to save for retirement. Similar to the DOL’s failed 2016 rule, which was vacated by a federal appeals court in 2018, this latest attempt will limit consumers’ choice of financial advice and access to products that can deliver protected lifetime income during retirement.
DOL is plowing ahead with its latest damaging proposal despite the fact that federal courts have repeatedly rejected their efforts to expand the fiduciary rule in recent years, as well as the extensive body of research showing that this type of proposal will significantly harm lower and middle-income workers and exacerbate the wealth gap for Black and Latino families.
Worse, the DOL proposal ignores the existing enhanced federal and state consumer protection regulations enacted since the earlier failed fiduciary rule. Those new protections require financial professionals to act in clients’ best interests, and there is no evidence to suggest they are not working.
By pushing forward with this proposal, DOL is choosing a path that we know will harm the consumers they seek to help when they can and should instead allow the current rules to work without depriving millions of retirement savers of access to their choice of financial professionals and products. DOL needs to stop pushing rejected, harmful policies and focus on enforcing the enhanced regulatory framework to protect retirement savers.
It’s time to reject DOL’s efforts to needlessly re-institute bad policy from the past that has been proven to disproportionately harm lower- and middle-income workers, particularly those who are Black and Latino. Instead, President Biden and Democrats and Republicans in Congress should look to the future and put forward policies that will build on what has already been accomplished to strengthen and enhance retirement security for more of America’s workers, retirees, and their families.
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Contact: Dan Zielinski
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