[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]


                      PROTECTING AMERICAN SAVERS
                        AND RETIREES FROM DOL'S
                          REGULATORY OVERREACH

=======================================================================

                                HEARING

                               Before The

        SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS

                                 OF THE

                COMMITTEE ON EDUCATION AND THE WORKFORCE
                     U.S. HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             SECOND SESSION

                               ----------                              



           HEARING HELD IN WASHINGTON, DC, FEBRUARY 15, 2024

                               ----------                              

                           Serial No. 118-37

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  Printed for the use of the Committee on Education and the Workforce
  
 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT] 


        Available via: edworkforce.house.gov or www.govinfo.gov
        
                               __________

                   U.S. GOVERNMENT PUBLISHING OFFICE                    
56-496                  WASHINGTON : 2024                    
          
-----------------------------------------------------------------------------------             

                COMMITTEE ON EDUCATION AND THE WORKFORCE

               VIRGINIA FOXX, North Carolina, Chairwoman

JOE WILSON, South Carolina           ROBERT C. ``BOBBY'' SCOTT, 
GLENN THOMPSON, Pennsylvania             Virginia,
TIM WALBERG, Michigan                  Ranking Member
GLENN GROTHMAN, Wisconsin            RAUL M. GRIJALVA, Arizona
ELISE M. STEFANIK, New York          JOE COURTNEY, Connecticut
RICK W. ALLEN, Georgia               GREGORIO KILILI CAMACHO SABLAN,
JIM BANKS, Indiana                     Northern Mariana Islands
JAMES COMER, Kentucky                FREDERICA S. WILSON, Florida
LLOYD SMUCKER, Pennsylvania          SUZANNE BONAMICI, Oregon
BURGESS OWENS, Utah                  MARK TAKANO, California
BOB GOOD, Virginia                   ALMA S. ADAMS, North Carolina
LISA McCLAIN, Michigan               MARK DeSAULNIER, California
MARY MILLER, Illinois                DONALD NORCROSS, New Jersey
MICHELLE STEEL, California           PRAMILA JAYAPAL, Washington
RON ESTES, Kansas                    SUSAN WILD, Pennsylvania
JULIA LETLOW, Louisiana              LUCY McBATH, Georgia
KEVIN KILEY, California              JAHANA HAYES, Connecticut
AARON BEAN, Florida                  ILHAN OMAR, Minnesota
ERIC BURLISON, Missouri              HALEY M. STEVENS, Michigan
NATHANIEL MORAN, Texas               TERESA LEGER FERNANDEZ, New Mexico
JOHN JAMES, Michigan                 KATHY MANNING, North Carolina
LORI CHAVEZ-DeREMER, Oregon          FRANK J. MRVAN, Indiana
BRANDON WILLIAMS, New York           JAMAAL BOWMAN, New York
ERIN HOUCHIN, Indiana

                       Cyrus Artz, Staff Director
              Veronique Pluviose, Minority Staff Director
                                 ------                                

        SUBCOMMITTEE ON HEALTH, EMPLOYMENT, LABOR, AND PENSIONS

                      BOB GOOD, Virginia, Chairman

JOE WILSON, South Carolina           MARK DeSAULNIER, California
TIM WALBERG, Michigan                  Ranking Member
RICK ALLEN, Georgia                  JOE COURTNEY, Connecticut
JIM BANKS, Indiana                   DONALD NORCROSS, New Jersey
JAMES COMER, Kentucky                SUSAN WILD, Pennsylvania
LLOYD SMUCKER, Pennsylvania          FRANK J. MRVAN, Indiana
MICHELLE STEEL, California           PRAMILA, JAYAPAL, Washington
AARON BEAN, Florida                  LUCY McBATH, Georgia
ERIC BURLISON, Missouri              JAHANA HAYES, Connecticut
LORI CHAVEZ-DeREMER, Oregon          ILHAN OMAR, Minnesota
ERIN HOUCHIN, Indiana                KATHY MANNING, North Carolina
                         
                         
                         C  O  N  T  E  N  T  S

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                                                                   Page

Hearing held on February 15, 2024................................

                           OPENING STATEMENTS

    Good, Hon. Bob, Chairman, Subcommittee on Health, Employment, 
      Labor, and Pensions........................................     1
        Prepared statement of....................................     4
    DeSaulnier, Hon. Mark, Ranking Member, Subcommittee on 
      Health, Employment, Labor, and Pensions....................     6
        Prepared statement of....................................     8

                               WITNESSES

    Ommen, Doug, Insurance Commissioner, Iowa Insurance Division.    11
        Prepared statement of....................................    13
    Roberts, Thomas, Principal, Groom Law Group..................    29
        Prepared statement of....................................    31
    Peiffer, Joseph C., President, Public Investors Advocate Bar 
      Association................................................    37
        Prepared statement of....................................    39
    Berkowitz, Jason, Chief Legal and Regulatory Affairs Officer, 
      Insured Retirement Institute...............................    69
        Prepared statement of....................................    71

                         ADDITIONAL SUBMISSIONS

    Ranking Member DeSaulnier:
        Statement dated February 15, 2024 from AARP..............   297
        Statement dated February 15, 2024 from Consumer 
          Federation of America..................................   301
        Supplemental Testimoney dated February 28, 2024 from 
          Joesph C. Peiffer......................................   297
    Foxx, Hon. Virginia, a Representative in Congress from the 
      State of North Carolina:
        Statement dated February 15, 2024 from American Bankers 
          Association............................................   309
        Statement dated February 29, 2024 from the American 
          Council of Life Insurers...............................   320
        Letter dated February 15, 2024 from America's Credit 
          Unions.................................................   327
        Statement dated February 15, 2024 from American 
          Retirement Association.................................   329
        Statement dated February 15, 2024 from The Erisa Industry 
          Committee..............................................   334
        Statement dated January 2, 2024 from The Erisa Industry 
          Committee..............................................   336
        Statement dated February 15, 2024 from the Investment 
          Company Institute......................................   342
        Statement dated January 2, 2024 from the Investment 
          Company Institute......................................   349
        Letter dated February 27, 2024 from the National 
          Association for Fixed Annuities........................   465
        Letter dated February 28, 2024 from National Association 
          of Insurance and Financial Advisors....................   471
        Statement dated February 15, 2024 from Representative 
          Wagner.................................................   487
        Signed bipartisan letter dated January 8, 2024...........   488

 
                       PROTECTING AMERICAN SAVERS
                        AND RETIREES FROM DOL'S
                          REGULATORY OVERREACH

                              ----------                              


                      Thursday, February 15, 2024

                  House of Representatives,
    Subcommittee on Health, Employment, Labor, and 
                                          Pensions,
                  Committee on Education and the Workforce,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:16 a.m., 
2175 Rayburn House Office Building, Hon. Bob Good [Chairman of 
the Subcommittee] presiding.
    Present: Representatives Good, Walberg, Allen, Banks, 
Burlison, Foxx, DeSaulnier, Courtney, Norcross, Wild, Hayes, 
Manning, and Scott.
    Also present: Bonamici
    Staff present: Cyrus Artz, Staff Director; Nick Barley, 
Deputy Communications Director; Mindy Barry, General Counsel; 
Jackson Berryman, Speechwriter; Michael Davis, Legislative 
Assistant; Isabel Foster, Press Assistant; Daniel Fuenzalida, 
Staff Assistant; Sheila Havenner, Director of Information 
Technology; Alex Knorr, Legislative Assistant; Marek Laco, 
Professional Staff Member; Georgie Littlefair, Clerk; John 
Martin, Deputy Director of Workforce Policy/Counsel; Hannah 
Matesic, Deputy Staff Director; Audra McGeorge, Communications 
Director; Rebecca Powell, Staff Assistant; Heather Wadyka, 
Professional Staff Member; Seth Waugh, Director of Workforce 
Policy; Joe Wheeler, Professional Staff Member; Maura Williams, 
Director of Operations; Jeanne Wilson, Retirement Counsel; 
Ilana Brunner, Minority General Counsel; Carrie Hughes, 
Minority Director of Health & Human Services Policy; Raiyana 
Malone, Minority Press Secretary; Kevin McDermott, Minority 
Director of Labor Policy; Kota Mizutani, Minority Deputy 
Communications Director; Veronique Pluviose, Minority Staff 
Director; Dhrtvan Sherman, Minority Committee Research 
Assistant; Nick Schiach, Minority Legal Intern; Clinton Spencer 
IV, Minority Staff Assistant; Adrianna Toma, Minority Intern; 
Melanie Kee, Minority Intern.
    Chairman Good. The Subcommittee on Health, Employment, 
Labor and Pensions will come to order. I note that a quorum is 
present, and without objection the Chair is authorized to call 
a recess at any time.
    When it comes to saving for retirement, one thing is 
certain, Americans should be able to retire in confidence. They 
should be able to seek out investment advice from the 
investment professionals of their choosing, assess the wide 
variety of options in today's marketplace, and then make their 
own decisions on the best options for their retirement.
    The Committee is meeting today to discuss the Department of 
Labor's newest plan to overregulate American retirement savings 
by imposing a costly, burdensome new rule. The so-called 
Retirement Security Rule expands the definition of investment 
advice fiduciary.
    This could have far-reaching implications for retirement 
savings and affect critical access retirement products for 
millions of Americans. First, I want to point out that DOL has 
overstepped their authority on this issue. The Employee 
Retirement Income Security Act, or ERISA, gives the Department 
of Labor authority to regulate retirement plans sponsored by 
private employers.
    However, the broad reaching new fiduciary rule regulates 
retirement accounts far beyond employer-sponsored benefits like 
IRAs. The rule is clearly outside the purview of the agency, 
yet they are trying to regulate it anyway. DOL's expansive rule 
is a blatant power grab, seeking to force more types of 
financial professionals under their control, but other 
regulatory bodies at the Federal and State level already 
exercise oversight over the retirement products and services 
that DOL is trying to bring within its jurisdiction.
    The SEC Regulation Best Interest Rule requires broker 
dealers to act in their client's best interests. The National 
Association of Insurance Commissioners Best Interest Rule also 
requires State regulatory annuity sales to be in the client's 
best interest. If the DOL has a real concern about self-
dealing, these issues have been addressed elsewhere.
    Moreover, my main concern is that the fiduciary proposal 
will have a disastrous impact on the industry. Past versions of 
the DOL fiduciary rule created massive headaches for the 
retirement products and services industry. The last time the 
government tried to issue a similar rule financial institutions 
were forced to eliminate or limit brokerage advice services as 
a result.
    A financial adviser in Virginia put it this way. The more 
layers of rules and regulations Congress and the White House 
add, the less likely it is that the average American will get 
the advice that they need. This rule will give too much 
latitude to the administrative State to go after anyone in the 
retirement business and will cause lawsuits to skyrocket.
    The cost of implementing the fiduciary proposal, and the 
significant legal challenges that will follow are not fully 
reflected in DOL's regulatory analysis. Make no mistake, DOL is 
forcing retirees to be hit with the costs. Last, the DOL gave 
stakeholders insufficient time to respond to the proposal and 
has refused to extend the comment period.
    This is a major departure from rulemaking norms. For 
example, a 2010 fiduciary rule allowed for a 90-day comment 
period and an extension. The new fiduciary proposal gave 
stakeholders a mere 39 working days. The DOL should be busy 
supporting implementation of secure 2.0 to encourage retirement 
savings, not proposing rules that will restrict access to 
financial advice and hurt our Nation's seniors.
    Planning for retirement is already challenging enough, but 
the Biden administration's overreach will make that process 
much worse. My goal in this hearing is to be a voice for our 
Nation's seniors, and to protect those planning retirement from 
the heavy hand of the bureaucracy. With that, I yield to the 
Ranking Member for an opening statement.
    [The prepared statement of Chairman Good follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]    

    Mr. DeSaulnier. Thank you, Mr. Chairman, and I want to 
thank the witnesses for being here as well. In 1975, I would 
like to say before I was born, but I am told, before staff was 
born who wrote this, Gerald Ford was President; my Golden State 
Warriors won the NBA Championship; 401K plans did not exist; 
and many Americans earned a traditional pension that provided 
guaranteed income for the rest of their lives once they 
retired.
    The retirement savings landscape has changed a lot since 
then. Nowadays workers who participate in retirement savings 
plans, 401K's, are more likely to be in a defined contribution 
plan, such as a 401K. These workers are responsible for 
selecting and managing their investments, as well as paying 
attention to fees and market trends.
    In today's do-it-yourself retirement savings world, it is 
up to the workers to ensure that they do not outlive what they 
save. Understandably, many workers seek professional advice 
when making retirement investment decisions, particularly as it 
relates to rolling over their assets from their employer-
provided plan to an individual retirement account, an IRA.
    Rollovers are often the biggest one-time financial decision 
workers and their families will make in their lives for their 
retirement. Many retirement advisers do right by their clients. 
Most, I would say. Unfortunately, there are those who do not. 
Those unscrupulous advisers steer their clients to a particular 
financial product with high fees that is profitable for the 
advisor, even if it is not in the best interest of the client.
    That is called conflicted advice, and it has a devastating 
effect and consequences for retirement savers and their 
families, and everyone's trust in the financial system. 
According to the Obama administration, conflicted advice cost 
retirement savers up to 17 billion dollars in losses every 
year.
    If a retiree spends down their retirement savings as normal 
but experiences a 100-basis point, 1 percent, reduction in 
investment performance because of conflicted advice, the 
retiree saver's savings would be completely depleted more than 
5 years early. President Biden's Council on Economic Advisers 
estimated that conflicted advice in the sale of fixed index 
annuities, just one of the many products that could be 
affected, may cost workers as much as 5 billion dollars in 
retirement savings per year.
    This is enormously harmful to workers and their families. 
We are very fortunate to have our witnesses, and our witness, 
Mr. Joseph Peiffer, President of the Public Investors Advocate 
Bar Association, as one of our witnesses today. Welcome. 
PIABA's attorneys have worked with tens of thousands of victims 
of conflicted advice.
    These are often proud American workers who played by the 
rules, and earnestly saved their retirement nest egg, often on 
middle class salaries, and they ended up losing a substantial 
amount of their life savings because of bad advice. This is not 
fair, and it is heartbreaking for them and for Americans. Many 
of you may be wondering, how can this happen?
    Well, bad actors can get away with providing conflicted 
advice because the primary Department of Labor regulation, 
which dates back to 1975, is riddled with loopholes, and 
neither the SEC's regulation Best Interest, nor the National 
Association of Insurance Commissioners Model Rule are 
sufficient to address the problem.
    Fortunately, the Biden administration has proposed a common 
sense, narrowly defined, and not narrowly tailored rule that is 
aligned with the current do-it-yourself retirement savings 
landscape. The Biden administration's Retirement Security Rule 
levels the playing field, and will ensure that workers, 
retirees, and retirement plan sponsors receive advice that is 
in their best interest.
    According to Morning Star, the Biden administration's 
Retirement Security Rule would have significant benefits for 
retirement savers. For instance, average costs of workers 
covered by a small plan would drop from 93 basis points down to 
75 basis points, while there would be minimal charges for most 
other plans.
    Retirement plan participants would save over 55 billion 
dollars in the first 10 years of the rule, and over 130 billion 
dollars in the subsequent 10 years. I strongly support the 
Biden administration's Retirement Security Rule. It will 
particularly help those with small account balances, and since 
those small savers are most vulnerable to conflicted advice.
    By taking action, the Biden administration demonstrates 
that it understands what is at stake for American workers and 
families. As our witness will put in his testimony, ``The 
difference between getting conflicted retirement advice and 
receiving advice in the investor's interest is sometimes the 
difference between the retiree being able to visit their 
grandkids or not, the difference between being able to afford a 
retirement home close to their children or living with them.''
    Those are the people who will be harmed by the broken 
status quo, and who will benefit the most from the Biden 
administration Retirement Security Rule that we will discuss 
today. I thank the Chair, and I yield back.
    [The prepared statement of Ranking Member DeSaulnier 
follows:]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

    Chairman Good. Thank you, Mr. DeSaulnier. Pursuant to 
Committee Rule 8(c), all members who wish to insert written 
statements into the record may do so by submitting them to the 
Committee Clerk electronically in Microsoft Word format by 5 
p.m., 14 days after the date of this hearing, which is February 
29, 2024.
    Without objection, the hearing record will remain open for 
14 days to allow such statements, and other extraneous 
materials referenced during the hearing to be submitted for the 
official record. I will now turn to the introduction of our 
distinguished witnesses.
    Our first witness is Mr. Doug Ommen, who serves as the 
Insurance Commissioner of the Ohio Insurance Division, and is 
located in Des Moines, Iowa. Mr. Ommen was appointed as 
Insurance Commissioner by the Governor of Iowa in 2017. He 
serves on the National Association of Insurance Commissioners 
Working Group that drafted the NAIC Best Interest Rule.
    He previously served in the Missouri Attorney General's 
Office working on consumer fraud issues. He has a law degree 
from St. Louis University School of Law. Welcome.
    Our second witness is Mr. Thomas Roberts, who is a 
Principal with the Groom Law Group, located in Washington, DC. 
Mr. Robers has practiced law at Groom Law Group since 2011. 
Previously he served for over a decade as Chief Counsel of ING 
U.S. Legal.
    Mr. Roberts has counseled clients for over 20 years on 
issues related to ERISA's fiduciary responsibility and 
prohibited transaction rules. He has an AB from Georgetown 
University, and a JD from the Georgetown University Law Center. 
Welcome Mr. Roberts.
    Our third witness is Mr. Joseph Peiffer, who is the 
President of the Public Investors Advocate Bar Association, and 
is located in Norman, Oklahoma. PIABA is a trade association 
for Plaintiff attorneys who represent investors in disputes 
with the securities industry.
    Mr. Peiffer is also a founding partner in a law firm, 
Peiffer, Wolf, Carr, Kane, Conway and Wise in New Orleans, 
Louisiana. His practice includes representing individuals and 
institutions that have been harmed by investment banks and 
brokerage firms, and prosecuting ERISA class actions.
    He has a BA from Bowling Green State University, and a JD 
from Tulane University Law School.
    Our final witness is Jason Berkowitz, who is the Chief 
Legal and Regulatory Affairs Officer for the Insured Retirement 
Institute in Washington, DC. IRI is the leading association for 
insured retirement strategies, including life insurers, asset 
managers, broker dealers, banks, marketing organizations and 
law firms.
    Mr. Berkowitz joined IRI in 2012. He started his career as 
a corporate attorney at two national law firms before working 
in government affairs for the Hartford Life Insurance Company. 
We thank all of the witnesses for being here today, and we look 
forward to your testimony.
    Pursuant to Committee Rules, we ask that you would each 
limit your oral presentation to a 5-minute summary of your 
written statement, and I would also like to remind the 
witnesses to be aware of their responsibility to provide 
accurate information to the Subcommittee. We will first 
recognize Mr. Ommen for 5 minutes.

   STATEMENT OF MR. DOUG OMMEN, INSURANCE COMMISSIONER, IOWA 
              INSURANCE DIVISION, DES MOINES, IOWA

    Mr. Ommen. Chairman Good, Ranking Member DeSaulnier, and 
esteemed members of the Subcommittee, thank you for having me 
here today. My name is Doug Ommen, and I serve as the Iowa 
Insurance Commissioner and have served in that capacity since 
2017.
    We regulate both insurance and security sales in Iowa. I 
appear today because of my concerns about the recent DOL 
fiduciary proposal. The proposal could have significant 
repercussions for the insurance regulatory framework, and 
negatively impact consumers.
    Given the retirement savings gap, the Department of Labor 
should be encouraging, not limiting access to well-regulated 
retirement guidance and products, such as annuities. Iowa plays 
a significant role in protecting consumers who purchase life 
insurance and annuities.
    We serve as a domiciliary State for approximately 40 life 
insurance companies, the ten largest of which hold nearly 90 
billion in assets. First, I am disappointed with the DOL's lack 
of substantive engagement with State insurance regulators. I 
expect that the DOL would want to fully understand our 
authority under these new, Best Interest Rules before this 
recent expansion into the retail annuity market. That did not 
happen.
    Further, I fundamentally disagree with the administration's 
characterization of State consumer protections around annuity 
sales as inadequate. Differences and regulatory philosophies 
should not be understood as a shortcoming. Over 150 years, the 
state-based regulatory approach has proven to be robust and 
responsive to the needs of our consumers.
    The regulatory landscape for annuities has dramatically 
changed since the last fiduciary proposal, due to the diligent 
work of State regulators and State legislators. In 2020, the 
NAIC revised the suitability and annuity transaction model 
regulation, adopting a best interest standard of care. The 
NAIC's Best Interest Rules require producers, when making 
annuity recommendations, to act in the best interest of the 
consumer, without placing the producer's or insurer's financial 
interest ahead of the consumer's interest.
    Currently, 42 states have implemented the Best Interest 
Rules. In this effort, I was significantly involved in every 
stage of the work leading up to the adoption of the Best 
Interest Rules. We gave serious time and thought to determining 
the appropriate standard of care for annuity sales.
    While we did consider a fiduciary approach, we found that 
fiduciary only standard would restrict consumers from cost-
effective access to the financial security products they need. 
In the 3-years since our adoption in Iowa, we have found 
consumer choice facilitates consumer access to retirement 
products.
    Iowans can obtain professional financial advice through fee 
or commission arrangements based on their needs. Consumer 
protection is best achieved through consistent enforcement of 
the requirement that the recommendations must closely align 
with the consumer's best interest, not by limiting access to 
well-regulated retirement guidance.
    I will now cover some specific objections. Our detailed 
objections are outlined in my written testimony, and the 
comment letters submitted by my department to the DOL on 
January the 2d. First, I am troubled by the DOL's inaccurate 
claims about the NAIC's Best Interest Rules. The DOL contends 
that the Best Interest Rules do not put the consumer first. 
This is wrong. The Best Interest Rules explicitly mandate 
producers act in the best interest of the consumer.
    Additionally, the DOL claims the Best Interest Rules do not 
adequately restrict compensation related conflicts of interest. 
However, the standard expressly prohibits sales contests, sales 
quotas, bonuses and non-cash compensation based on specific 
sales of annuities within a limited timeframe.
    The DOL also claims the Best Interest Rule permit producers 
to recommend products that are worse for the consumer because 
they are better for the producer insurer's bottom line. This is 
wrong. The Best Interest Rules require the consumers interest 
takes precedence.
    Our regulatory philosophy is to focus on the requirement 
that the recommendation must be in the best interest, requiring 
the recommendations must closely align with the consumer's 
situation, needs and objectives. The consumer's best interest 
must be first. Last, the DOL claims the state's annuity's 
regulations vary from State to State.
    This is wrong. Forty-two states have adopted the Best 
Interest Rules, and we anticipate broader adoption by the end 
of 2024. The DOL's proposal poses a substantial threat to the 
ability of Iowa and other states to regulate life insurance and 
annuity markets effectively. Thank you for the opportunity to 
present these concerns, and I do look forward to answering any 
questions that you may have.
    [The Statement of Mr. Ommen follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. Thank you, Mr. Ommen. I will now recognize 
Mr. Roberts for 5 minutes.

 STATEMENT OF MR. THOMAS ROBERTS, PRINCIPAL, GROOM LAW GROUP, 
                        WASHINGTON, D.C.

    Mr. Roberts. Good morning. I would like to thank Chairman 
Good, Ranking Member DeSaulnier, Chairwoman Foxx, and Ranking 
Member Scott for inviting me to testify today. I also thank all 
of the members of the Subcommittee for their dedication to 
improving the retirement security of American workers.
    I am a Principal with the Groom Law Group in Washington, 
DC. I concentrate my practice on ERISA related matters 
involving retirement plans. I have counseled on issues relating 
to ERISA's fiduciary responsibility in prohibiting transaction 
rules for more than 30 years.
    My testimony this morning reflects my own personal views, 
and not those of any client, my firm, or my colleagues. I am 
not testifying on behalf of a client, or any other party, and I 
am not being paid in connection with my testimony today. The 
topic of this hearing is the U.S. Department of Labor's 
overreaching 2023 proposal to redefine persons who function as 
investment advice fiduciaries for purposes of ERISA and the 
Internal Revenue Code.
    The DOL proposal exemplifies the proverbial warning that 
even when an action is undertaken with the very best of 
intentions, it may nonetheless lead to harmful results. In this 
case, the Department's motivation in advancing the proposal 
undoubtedly was with the best of intentions, and with the 
objective of improving retirements safer outcomes.
    The effects of implementing this proposal would be 
disastrous. The proposal would do harm to the retirement 
investor community by depriving it of access to much needed 
information, products, and services. The proposal would impose 
numerous, additional, regulatory compliance burdens on 
investment professionals who serve the needs of retirement 
investors, and in particular, on those who serve the needs of 
lower and moderate-income investors.
    The effect of those added burdens would be to leave large 
segments of the retirement saver community either unserved 
altogether, or underserved. I would like to briefly explain why 
this is the case. The DOL proposal would sweepingly confer 
ERISA fiduciary status on virtually all financial professionals 
and salespeople, including broker dealer representatives and 
insurance agents.
    ERISA fiduciary status is not something to be assigned 
lightly, nor should be assigned in context where it would be 
inappropriate. This is because ERISA imposes a high standard of 
conduct, the highest known to law, on persons responsible as 
fiduciaries to ERISA plans.
    The ERISA fiduciary standard of conduct does not require 
merely acting in the best interest of plan participants and 
beneficiaries, it requires acting prudently and solely in the 
interest, layered on top of that general standard of conduct 
are ERISA's prohibited transaction rules.
    Those rules disallow fiduciaries from acting in 
transactions where they have a financial interest, and from 
receiving compensation from third parties in connection with 
the transaction unless No. 1, an exemption is available, and 
No. 2, the fiduciary complies with the conditions of that 
exemption.
    Under the DOL proposal, otherwise ordinary sales 
commissions and other traditional forms of transaction-based 
compensation earned by insurance agents and brokering 
representatives would automatically be transformed by the 
prohibited transaction rules.
    Those commissions would give rise to an illegal kickback 
each time and investment professional makes a sale to an ERISA 
plan participant, or IRA owner, unless that investment 
professional adheres to the Department's exemption conditions. 
Here is a key watch out.
    The Department's prohibited transaction exemptions afford 
no relief, none, from the general standards of fiduciary 
responsibility under ERISA. An ERISA fiduciary, even when 
complying with an exemption, remains obligated at all times to 
act not just in the best interest, but solely in the interest 
of plan participants and beneficiaries.
    In many contexts, the application of ERISA's fiduciary 
standard of conduct is entirely appropriate and is protective 
of participant interests. When fiduciary status is not 
appropriately assigned, it can have the opposite effect. This 
is the case with the DOL's proposal.
    Inappropriately assigning fiduciary status to investment 
professionals, such as broker dealer representatives, and 
insurance agents, who are compensated on a transaction basis, 
and receive sales commissions, will produce tragic results. It 
will curtain retirement saver's access to much needed financial 
assistance, and the proposal is not needed.
    Federal securities and State insurance regulators have 
separately adopted best interest standards for sales conduct 
for their respective industries. Thank you for the opportunity 
to appear this morning, and I look forward to taking your 
questions.
    [The Statement of Mr. Roberts follows:]
    [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. Thank you, Mr. Roberts. We will now 
recognize Mr. Peiffer for 5 minutes.

STATEMENT OF MR. JOSEPH C. PEIFFER, PRESIDENT, PUBLIC INVESTORS 
           ADVOCATE BAR ASSOCIATION, NORMAL, OKLAHOMA

    Mr. Peiffer. Thank you. There we go. I am here on behalf of 
the investors, myself, and my colleagues that PIABA have 
represented. PIABA, the Public Investor Advocate Bar 
Association, is a bar association of hundreds of attorneys 
around the country that have dedicated their lives to 
representing investors that have been the victim of financial 
advisor misconduct.
    I have represented thousands of investors in my 25-year 
career, and collectively PIABA members have represented 
hundreds of thousands of investors. Our clients are people who, 
invariably, trusted their financial professional.
    After all, the vast majority of these investors gave their 
entire life savings to their advisor. None of the people that I 
have ever represented realized that their advisor might be held 
to a standard anything below that of a doctor, or an attorney.
    It is not like people come out of the womb believing 
brokers have a fiduciary duty to their clients. No. It is 
because the financial services industry has been marketing and 
advertising that their advisors live up to a fiduciary duty.
    The industry often refers to financial advisors as 
``trusted advisors'' or compare themselves to doctors. As one 
company puts it, ``As doctors take care of physical health, 
good financial professionals help take care of financial 
health. Just as you consult a doctor for a range of health 
questions, you can work with a financial professional on a host 
of different options regarding your plan for retirement.''
    Academic studies that have looked at this issue conclude 
what is obvious to anyone who has ever met an investor who has 
been the victim of conflicted advice. That is, investors do not 
know the duties their financial professionals owe them. One 
thing is clear: right now, the very same advisors that 
advertise like fiduciaries, routinely dispute that they owe a 
fiduciary duty to their client.
    Firms advertise like they have duties of doctors but 
litigate like they owe no more duty than that of a used car 
salesman. The Department of Labor Rule would go a long way 
toward holding firms accountable in the retirement accounts for 
the duty they already say they have and that investors already 
believe they have.
    What does this mean on an individual level to investors? 
For some, the difference between receiving conflicted advice, 
or receiving advice solely in their interest, is a difference 
between being able to afford to visit their grandkids or not. 
Being able to afford a retirement home near their children or 
living with their children. The difference between being able 
to retire in their 60's or in their 70's.
    For others, it is the difference between being able to live 
out their golden years with dignity, knowing that their hard 
work and savings has paid off, or being shattered by the 
reality that by trusting their advisor, who gave conflicted 
advice, they are left with nothing to show for 30 or 40 years 
of hard work and savings.
    Almost every week we see a retiree come into our office who 
has lost a substantial amount of their life savings. These are 
often proud, strong workers, that if they go on vacation at 
all, they travel in a car, like I did when I was growing up. 
They have saved to pay off their house, put their children 
through college, and build a nest egg, all on middle class 
salaries.
    Now these proud, strong Americans, they breakdown in my 
office when I explain to them how their investment was lost to 
conflicted advice, and that their advisor did not owe them a 
fiduciary duty. I have had clients live with me because they 
could not afford the gas and lodging to drive back and forth to 
a long trial.
    I have had clients that ran out of money and had to rent a 
room from their ex-spouse, and I have even, unfortunately, had 
clients attempt suicide. I know the devastation that losing 
your life savings can have on hard working Americans. This rule 
will make this better.
    The members of PIABA and myself see the effect of this 
conflicted advice on an individual level every day. One of my 
clients worked at a chemical plant for a major corporation, 
making $80,000.00 a year, until he got the conflicted advice 
that he should cash out his retirement account and rollover his 
entire savings to the financial advisor.
    He was out of money before he was eligible for social 
security, and he had to go back to work at that same plant 
stocking vending machines for $10.00 an hour. Now this rule 
does not just help investors, it also helps ethical advisors. I 
think that most advisors are good, ethical people that try to 
do right by their clients.
    I use a financial advisor. My best friend Mark Bailey is a 
financial advisor, and he is here behind me today. This rule 
would help ethical advisors by clarifying that when advising 
folks on their retirement money, investors must always come 
first. It evens the playing field for advisors who are already 
doing the right thing and acting in their client's best 
interest.
    I appreciate the opportunity to talk to the Subcommittee 
about this important issue, and I urge the DOL to promptly 
finalize this rule, so that workers and retirees across the 
country get the fiduciary advice that they deserve, and they 
believe they are already getting. Thank you very much. I look 
forward to your questions.
    [The Statement of Mr. Peiffer follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. Thank you, Mr. Peiffer. Finally, we will 
recognize Mr. Berkowitz for 5 minutes.

 STATEMENT OF MR. JASON BERKOWITZ, CHIEF LEGAL AND REGULATORY 
AFFAIRS OFFICER, INSURED RETIREMENT INSTITUTE, WASHINGTON, D.C.


    Mr. Berkowitz. Good morning, Chairman Good, Ranking Member 
DeSaulnier, Chairwoman Foxx, and Ranking Member Scott, and 
members of the Committee--Subcommittee. My name is Jason 
Berkowitz, and I am the Chief Legal and Regulatory Affairs 
Officer for the Insured Retirement Institute.
    IRI represents the entire supply chain of the insured 
retirement industry, including insurers, distributors, asset 
managers, and solution providers. I would like to begin by 
thanking Chairwoman Foxx, and many other Subcommittee members 
for your longstanding commitment to enhancing retirement 
security for all Americans, without impairing access to 
valuable products and services.
    Thank you for the opportunity to share our views about the 
DOL's latest fiduciary proposal. Let me start with one very 
clear statement. I am not here today to oppose a best interest 
standard. IRI wholeheartedly believes that all consumers should 
be able to trust that advice they receive from financial 
professionals is in their best interest.
    Our industry is full of good, hard-working financial 
professionals, who share this perspective. I am here today to 
oppose the DOL's proposal, which goes far beyond a best 
interest standard, and would harm those who most need the 
guidance and assistance of financial professionals.
    Retirement savers face many risks as they strive for 
financial security, including the risk of running out of money. 
Protected lifetime income products helps savers manage this 
risk, and professional guidance helps them acquire and use 
these products appropriately.
    Congress recognized this when it enacted the Secure Act and 
the Secure 2.0 Act, bipartisan laws designed to strengthen our 
retirement system by expanding access to these valuable 
products and services. Conversely, the DOL proposal, which is 
functionally equivalent to the now vacated 2016 fiduciary rule 
will foster widespread retirement insecurity, just as that 
predecessor rule did.
    Millions of low-and middle-income workers, especially those 
most impacted by the wealth gap, will find it nearly impossible 
to access the products and services they need to achieve a 
secure and dignified retirement. By contrast, the Best Interest 
Rules adopted by the SEC and 42 states and counting, are 
working to protect consumers without putting unnecessary 
roadblocks between consumes and the products and services they 
need.
    IRI supports those measures, which provide regulators with 
the tools they need to protect retirement savers, and 
appropriately address the conduct of bad actors. With these 
rules in place, the DOL's proposal is a solution in search of a 
problem. The DOL has hypothesized that regulatory gaps exist, 
and are being exploited to harm retirement savers, but it has 
produced no evidence to support that theory.
    If bad actors are exploited regulatory gaps to harm 
retirement savers, those gaps should be addressed through 
targeted rulemaking. A targeted approach is impossible without 
clear evidence of a problem, so instead, the DOL wants to 
completely upend the existing regulatory framework.
    They have characterized this proposal as a Best Interest 
Rule, even going so far as to assert that anyone complying with 
the SEC's regulation best interest should have no problem 
operating under this proposal. This is simply not true. Under 
ERISA, the Department can only regulate the conduct of those 
who trigger fiduciary status, so the proposal would shoe horn 
nearly all financial professionals into that status.
    You may be wondering why is that a problem given our 
support for a best interest standard? It is a problem because 
ERISA fiduciaries must act ``solely in the interest of 
participants and beneficiaries, for the exclusive purpose of 
providing benefits to participants and their beneficiaries.''
    Merely acting in the client's best interest is not enough 
to satisfy this standard. As a Federal Appeals Court recognized 
when it rejected the 2016 Rule, fiduciary status should apply 
only when there is a special relationship of trust and 
confidence. DOL has tried to circumvent that decision by 
asserting that that sort of relationship exists whenever a 
financial professional makes a recommendation to a retirement 
saver. We disagree.
    A special relationship of trust and confidence cannot 
spring into existence spontaneously. Rather, it must be 
intentionally cultivated over time. Pretending otherwise, will 
deepen the Nation's retirement crisis, and further exacerbate 
retirement insecurity among your constituents.
    Instead, the DOL should recognize the limits of its 
jurisdiction, and let the SEC and the State Insurance 
Department do their jobs as Congress intended. This proposal is 
not fixable. It is not needed, and it must be withdrawn. Thank 
you, and I look forward to answering your questions.
    [The prepared statement of Mr. Berkowitz follows:]
   [GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
    
    Chairman Good. Thank you, Mr. Berkowitz. Under Committee 
Rule 9, we will now question witnesses under the Five Minute 
Rule. I will wait to ask my questions at the end, and 
therefore, recognize Mr. Walberg from Michigan for 5 minutes.
    Mr. Walberg. Thank you, Mr. Chairman, and thanks to the 
panel for being here. This is an ongoing discussion with all 
sorts of changes and changes in stance, and I am sure that 
since 2010 DOL's attempts to change the definition of an 
investment advice fiduciary have created costly and constantly 
shifting landscape for all of us.
    Mr. Berkowitz, can you discuss the costs and confusion the 
industry and the retirement investors have faced due to DOL's 
shifting stance in the fiduciary status?
    Mr. Berkowitz. Thank you for that question. Yes. Look. We 
have had a situation here that is been going on now for a 
decade and a half, basically. We have had fits and starts where 
the Department has put out a proposal, withdrew the proposal, 
came back 5 years later with an even more stringent proposal, 
gotten themselves in Court after finalizing that rule, have 
that rule overturned.
    Took another stab at in 2020 with rules that actually did 
go into effect and are working as designed. Now, just 2 years, 
3 years later, are again looking to change the rules of the 
road. Along the way we have had SEC directed by Congress to 
study this issue of what standards should apply. Studies were 
done, decisions were made by the SEC about what they should--
how they should regulate the conduct of financial advisors.
    The NAIC has responded as the Commissioner Ommen referenced 
earlier, and adopted a very strong regulation concurrent with 
what the SEC did with regulation best interest. Moving 
goalposts constantly does not allow for the situation to 
settle, for firms to say okay, when you understand our 
responsibilities, for advisers to understand their 
responsibilities, to adapt their practices appropriately, and 
to be able to then make changes, and implement those, and then 
follow through on them.
    Give regulators time to examine those. At this point, the 
examination of whether these rules are working or not, is still 
ongoing. We believe that it is. Everything we are hearing is 
that it is working, but that needs to continue. Changing the 
rules of the road those analyses are complete makes really no 
sense and will just create more confusion along the road.
    Mr. Walberg. Yes. It seems that a bobblehead mixed with a 
whack-a-mole climate is not helpful. Mr. Roberts, since U.S. 
Court of Appeals for the Fifth Circuit vacated the 2016 
Fiduciary Rule, a new framework governing the standard of 
conduct of financial professionals has been put in place.
    The Security and Exchange Commission has implemented a 
regulation's best interest standards as has been discussed. The 
DOL has implemented a new proposed transaction exemption, and 
the National Association of Insurance Commissioner's Best 
Interest Rule has been adopted in 42 states, as was mentioned.
    How have these new rules affected the regulatory landscape, 
and could you comment on whether the new regulatory framework 
is working?
    Mr. Roberts. Thank you for your question. I would be happy 
to. You know, the facts recounted in your question evidence the 
fact that there has been tremendous forward progress in 
enacting appropriate standards of conduct for investment 
professionals, including investment professionals who are 
compensated on a transaction basis, and work for broker dealers 
and insurance agents.
    Both industries are subject to a best interest standard of 
conduct. That is a tremendous forward momentum in the consumer 
protections that are available to protect retirement savers 
today.
    Mr. Walberg. Yes. Appreciate that. Commissioner Ommen, did 
DOL work with the states to develop the proposed Fiduciary 
Rule?
    Mr. Ommen. They had some very limited contact with some of 
our full-time staff, but no, nothing substantive was every 
discussed.
    Mr. Walberg. Nothing significant.
    Mr. Ommen. The answer to that question is no. We believe 
that really, it would be important to have those discussions to 
make sure that the regulation, as it moves forward, it would be 
complementary of what is happened at the SEC as well as the 
states.
    Mr. Walberg. Yes. The coordination is so important on this, 
especially since we are talking about people who are 
vulnerable. They do not know what they are doing. They just 
want the outcome to be good. Do you have any other concerns 
with the way DOL has handled the development and rollout of the 
proposed Fiduciary Rule?
    Mr. Ommen. Yes. I mean the support for their rulemaking 
really in a large part, was to discredit the work that was done 
at the State level under the NAIC's Best Interest Rule----
    Mr. Walberg. To discredit----
    Mr. Ommen [continuing]. And frankly that was based upon 
unsupported speculation because they never spoke to us.
    The rules have dramatically changed. We are in the midst of 
implementation reviews and enforcement, so you would think that 
before they started to make those sorts of speculations about 
the meaning of our rule, they would speak to the people who 
drafted it.
    Mr. Walberg. You would hope so. Well, I see my time is 
expired. I yield back.
    Chairman Good. Thank you, Mr. Walberg. We will now 
recognize Mr. Norcross from New Jersey for 5 minutes.
    Mr. Norcross. Thank you, Chairman, and to the leadership 
for holding this important hearing. This in many ways is 
personal for me. I grew up and became an electrician and was 
blessed to be able to work for the IBEW for close to 45 years. 
The last 17 of which I worked as the Assistant Manager.
    As part of my duties, several times a week we would have 
members come in with a smile on their face into our office. You 
knew that smile because they were coming in to retire, to sign 
the papers, to start that part of life. They worked hard. They 
played by the rules, and they wanted to be able to retire with 
dignity.
    Certainly, when we see that, a conversation with myself, as 
a Representative, so important because they get so much 
information on how they should invest their money. We would 
truly share with them the experiences of many other members. 
Well, the idea of having a member come in and hear a story 
where, like you, Mr. Peiffer, he was sold a bill of goods, and 
he walked away with nothing.
    Now that was over a dozen years ago, but the pain is still 
there. We have been at this for close to a decade. Where we 
were 10 years ago, and where we are today, is a very different 
world. The industry has come a long way. Are we perfect? Not, 
no we are not. The idea of understanding that, and anecdotally, 
there is always going to be those bad players out there no 
matter what we do.
    The idea of not being able to retire because somebody 
ripped you off, it is just heartbreaking. We all can see that. 
The idea that many of these things, and this is a highly 
complex issue, and I want to applaud Mr. Walberg. We worked 
together on many of these issues over the last few Congresses, 
talking about annuities, and having the ability to put in a 
qualified defaulted, investment alternatives.
    You would read somewhere that the idea of having fixed 
income through an alternative, or what many people would look 
at as an annuity, I think the baby is going out with the bath 
water, so I implore us to work together to get this thing 
right. I cannot tell you how important it is. Certainly, many 
of the folks that I have worked with my whole life are very 
much in favor of this.
    I do not want the baby thrown out with the bath water 
because, historically, less opportunities for those who really 
need advice because the industry pulls back for fear that they 
are going to be sued. I want to start out, Mr. Berkowitz, when 
you look at some of the issues that are before us concerning 
annuities, give me your view on where you think they are in 
terms of what would fall into the Fiduciary Rule.
    One of the concerns I had is back then if I was a business 
agent today, would I be considered under this rule a fiduciary?
    Mr. Berkowitz. Thank you for that question, Congressman, 
and yes, I do think that there is a risk that under this rule 
in that capacity you would have been subject to fiduciary 
status in the course of performing those duties. Annuities are 
a product that can be used if properly used, can sustain 
someone through their retirement years to ensure that they do 
not run out of money, to ensure that they do not get to that 
zero dollar staring at them in their account balance, when they 
still have life left to live.
    By providing a regulation such as this that makes it harder 
to make those products available. You are hurting the very 
people that are supposedly being helped here. What we think is 
the regulation--the regulatory system needs to be designed to 
ensure that if you are making a recommendation, you should have 
to act in your client's best interest.
    The SEC has done that. The NAIC and the State insurance 
departments are doing that. It is unnecessary at this point for 
the Department of Labor to layer on additional obligations. Now 
if you----
    Mr. Norcross. I have 45 seconds, so I really appreciate. I 
want to give Mr. Peiffer an opportunity to chime in here 
because the idea of where we are 10 years ago, where we are 
today, please.
    Mr. Peiffer. Sure. I think we have made some progress. 
However, it is not enough. There are still big, gaping holes in 
the regulatory system. Reg BI, for instance, does not cover 
advice to plans. Reg BI does not cover advice to annuities. I 
am not saying you cannot sell annuities to a retiree, that is 
not what I am saying.
    I am saying that it should be governed by a good, solid 
fiduciary standard like the DOL has proposed, rather than the 
Model Rule, which does not even count compensation as a 
conflict. If compensation is not a conflict, what is? It is 
directly related to the investor savings. The more the 
compensation to the advisor, or the insurance agent, the bigger 
the surrender period, the bigger cost to the investor.
    Mr. Norcross. Thank you. Unfortunately, my time has 
expired. I yield back.
    Chairman Good. Thank you, Mr. Norcross. I will now 
recognize Mr. Allen from Georgia for 5 minutes.
    Mr. Allen. Thank you, Mr. Chairman, and thank you for this 
timely hearing based on this DOL ruling. Obviously, all of us 
believe saving for retirement is crucial for American families, 
and access to professional financial advice should not be 
hindered by burdensome overregulation.
    However, the Biden Department of Labor has recently 
proposed fiduciary rules, nothing more than a recycled Obama 
era disaster. It does more harm than good to the very people it 
is claiming to protect and has American retirees and savers. We 
dont just have anecdotal evidence that this will lead to 
decreased access to financial advice for Americans, but actual 
data is shown by an almost identical rule issued by DOL in 
2016, before the Fifth Circuit Court--Fifth Circuit vacated the 
rule in its entirety in 2018.
    A Deloitte study shows that the 2016 Rule limited or 
eliminated financial advice to 10.2 million accounts. Both 
sides of the aisle urged DOL not to reduce access as expressed 
in a 2015 letter from 96 House democrats, and a 2023 letter 
from Senate democrats showing their concern. This precisely why 
I plan to introduce a congressional Review Act, a joint 
resolution of disapproval on the DOL's Fiduciary Rule as soon 
as its finalized and transmitted to Congress.
    Commissioner Ommen, Congress passed Secure 2.0 to encourage 
retirement savings. Could you outline how DOL's fiduciary 
proposal could have the opposite result, and that is do you 
think the proposal will decrease access to retirement savings 
like the 2016 Rule did? Please explain.
    Mr. Ommen. Yes. I represent--yes, I do fear this regulation 
will have the opposite effect of the intent of the Secure Act. 
The numbers show that between now and 2027, 4.1 million 
Americans will be turning 65 every year. That is 11,200 a day. 
The median household for earners here in the U.S. is $63,000.
    It is important to know that the median income among 
annuity owners is $76,000. These are products that really are 
targeted to provide retirement security for individuals that 
are not wealthy. These are middle-class and lower middle-class 
individuals that are planning for their future.
    Yes, it is our view, and in fact we took those issues into 
consideration as we looked and studied whether a fiduciary only 
approach makes any sense at all. We do view that--we are 
interested in working with you to try to advance that, closing 
that retirement gap----
    Mr. Allen. Exactly.
    Mr. Ommen [continuing]. We believe that the DOL's rule is 
going in the opposite direction.
    Mr. Allen. Yes. We do not need to discourage it. Mr. 
Roberts, the U.S. Court of Appeals for the Fifth Circuit Court, 
which Mr. Walberg brought up, vacated the 2016 Fiduciary Rule. 
The Court explained that under ERISA, fiduciary status may only 
be imposed when there is a special relationship of trust and 
confidence.
    How does the current fiduciary proposal address this issue, 
and does the fiduciary's proposal approach comply with the 
Fifth Circuit's decision?
    Mr. Roberts. How the Department of Labor's current proposal 
could possibly be consistent with the Fifth Circuit's ruling on 
the prior proposal is a real head scratcher. I do not see it. 
The Fifth Circuit said very clearly, very clearly, that when 
Congress enacted ERISA, it did not intend to impose fiduciary 
standards on persons like stock brokers or insurance agents who 
are professional sales people.
    It distinguished the conduct standards applicable to 
salespeople from the conduct standards applicable to 
fiduciaries, like trustees. Trustees is what they were talking 
about, and folks who function like trustees, who are in a 
relationship of trust and confidence. I see absolutely no 
consistency between this current proposal and the Fifth 
Circuit's Rule.
    Mr. Allen. Mr. Berkowitz, obviously this is in contrast 
with SEC regulations, best interests, and NAIC's interest 
standards. Who would stand to benefit or profit from this rule? 
I mean we are looking at more litigation, trial lawyers? What 
is the deal here?
    Mr. Berkowitz. Well, look. Thank you for that question, 
Congressman. I think that their--the intent here we want to 
assume the best of intentions from the Department, but in 
reality, it is the consumer who will suffer the most. Who will 
benefit? That remains to be seen, but I can assure you that it 
will not be the consumer.
    Mr. Allen. Yes. Great. I yield back.
    Chairman Good. Thank you, Mr. Allen. We will now recognize 
Mr. Courtney for Connecticut for 5 minutes.
    Mr. Courtney. Thank you, Mr. Chairman, and like some of us, 
we have been through this rodeo for a while, and--but I thank 
the witnesses for your input here today. I have to just say at 
the outset, I mean I understand painfully that there is real 
honest disagreements in terms of the scope of the rule, the 
language of the rule, which I think is fair game.
    I think everybody has a good, I think, point to make 
sometimes in terms of just, again the way it was drafted, and 
we went through this as I said once before. I have to say, 
Commissioner, I was reading your testimony on page 5 where you 
said that I would be remiss if I did not also express my 
concerns that DOL has overstepped its statutory authority in 
promulgating this proposed rule.
    I mean to me that sort of gets to a much more almost 
ideological question about whether or not DOL really should be 
even involved in this. I mean, with that logic, the 1975 Five 
Part Rule really should be like repealed and eliminated. I just 
wanted you to clarify.
    I mean, do you really think that DOL should completely 
absent itself, and get rid of the 1975 Rule?
    Mr. Ommen. No. That is not.
    Mr. Courtney. Well, then why did you put that in your 
testimony that DOL has no role there. Of course--they are an 
agency. Administrative law from every department, from the 
Department of Defense to the Department of Education, they 
issue regs constantly, and this is well within the scope of 
ERISA in terms of DOL's authority.
    Again, I just--I mean I appreciate the fact that you say 
you do not want to repeal the 1975 law. I think that is very 
inconsistent, honestly, with the language of your testimony. 
Mr. Peiffer, again, just to sort of talk about a few sort of, 
you know, comments that have been made here, which really have 
just sort of created my opinion of false equivalency between 
the 2011 proposal and this proposal.
    Again, if you could just walk through again, the fact that 
this is not like the 2011 proposal was put through a copy 
machine, and it is back before us again.
    Mr. Peiffer. Absolutely not. It is a totally different rule 
with a much, much more narrow, more of a rifle shot focus. The 
earlier rule made a lot of people fiduciaries, and it subjected 
even things like websites and robo-advisors to fiduciary 
standards.
    That turns out to not--the Fifth Circuit, overturned that. 
They went back to work, and they sharpened their pencils and 
really narrowed the rule. Now, who is a fiduciary? It is 
someone who has discretionary authority over an account, 
meaning they can trade in your account.
    Someone who calls themselves a fiduciary, and someone that 
as a regular part of their business provides advice based on 
the particular needs or individual circumstances of a 
retirement investor--and gives advise that may be relied upon 
by the retirement investor as a basis for investment decisions 
that are in the retirement saver's best interest.
    That has a narrow standard where we had a very broad 
standard before. Also, the previous rule contained a contract 
requirement, and that I think was a lot of what the Fifth 
Circuit had a problem with. That is not in this rule.
    Mr. Courtney. Well, I think that is important to note that 
people should take a deep breath here, and just sort of 
recognize you know, acknowledging the role of Insurance 
Commissioners again, our Commissioner in Connecticut, Andy 
Mays, I respect and really admire to the highest degree.
    Honestly, I think he understands. I do not want to put 
words in his mouth, but I mean I think it is coexistence. I 
mean, it is joint jurisdiction. I mean I think you did allude 
to that at least in your testimony. Both states and the Federal 
Government have a role here, and it is a question of just 
getting the right balance to make sure that we are not seeing 
these horror stories, like my friend Mr. Norcross just 
described.
    They are still happening, okay, and they should not happen. 
That is really what I think we should, you know, hopefully be 
able to have consensus that that is a problem, a real problem, 
and that we should try and figure out a way to solve it without 
again, just you know, going through wash, rinse and repeat, in 
terms of just, you know, handcuffing the Department's role, 
which I think is legitimate.
    I think that that is what you know when ERISA was passed in 
1975, you know regs were issued. That was consistent with the 
intent of Congress. Again, we should all have plenty of time to 
debate and talk, and there are comment periods, and all that 
built into the system, but to sort of shut it down and just go 
right back to the status quo.
    Again, the NAIC has put out its proposals, that is great. 
It does not have all 50 states, so it is leaving some people 
out. The fact of the matter is it really--it is not the Ten 
Commandments, and we really need to sort of work together to 
get the best product using both people of good will at both 
levels of government working together. I yield back.
    Chairman Good. Thank you, Mr. Courtney. I now recognize Mr. 
Burlison from Missouri for 5 minutes.
    Mr. Burlison. Thank you, Commissioner Ommen. We should all 
be able to agree that the Department of Labor is changing their 
position on what it means to be an investment advice fiduciary 
three times in 3 years, is onerous. The costs and the confusion 
that goes along with this are clearly not in the best interests 
of either the providers, or the individual savers or retirees.
    What do you see as the biggest concerns with the way that 
the Department of Labor has developed this new proposal?
    Mr. Ommen. Well, there were just comments from one of your 
fellow Subcommittee members about that lack, or the 
encouragement to have that communication. There was no 
communication, in my view, with regards to the development of 
this rule.
    I have been doing enforcement for a long time. I worked in 
the Missouri Insurance Department, as well as served as an 
Assistant Attorney General, prosecuting scam artists. I can 
also tell stories of people that were ripped off by insurance 
agents and securities agents.
    For my perspective, what we need to make sure is when 
regulations are put into place that they do not punish the 
well-intentioned individual, the investment advisor, the 
fiduciary, frankly, the insurance producer who is doing the 
good work. In my experience, that has been the vast majority.
    The Department of Labor seems to just be overreaching with 
their view that there should be a fiduciary mandate. Commission 
structures and transaction based are often the most cost-
effective way by which middle Americans can receive good 
advice. With the State, we focused on making sure that the 
advice is solid, that it has put the interests of the consumer 
first.
    My criticism of the DOL has really been the lack of 
opportunity to sit down and have some of the recent 
discussions. As for the comment period, I got my comments in. 
We worked through the holidays. It was very abbreviated in my 
perspective, in trying to meet those requirements.
    To be frank, I do not think the DOL was open for 
discussions, but that would frankly be----
    Mr. Burlison. It was over for what, 39 days?
    Mr. Ommen. Something like that. Again, this is through the 
holidays, so you know, it was basically all due right after the 
new year.
    Mr. Burlison. Your responsibility, let us talk about the 
state's role in this. We assume that we have to have all the 
answers on the Federal level, but the State plays a role in not 
only managing the activities, the licensing, everything that 
goes into the people that are able to do business in their 
State.
    Mr. Ommen. Yes. We begin our process in revising our 
standard to a best interest standard before the Court struck 
down the DOL Rule. We looked at a fiduciary only approach, but 
we worked together, and there are--it is true, there are 42 
states that have adopted this, but I expect by the end of this 
year we will be approaching 50.
    I know it is moving in those states that have not yet 
adopted it, so I am very confident, certainly by early 2025 we 
will have all jurisdictions. Yes, I mean these--the efforts 
that went into this were really designed to ensure that the 
consumers had choice.
    In Iowa, we have a lot of a--we have a very large 
agriculture business. The distribution for annuities, for self-
employed individuals, and those that are in farming, is very 
different than the distribution that you might find in some of 
our urban areas. It is really important for that distribution 
to be available for all middle Americans, again not just for 
those that are able to afford the fees associated with a 
fiduciary status.
    Mr. Burlison. Yes. I can tell you as a former investment 
advisor, you have--you feel the weight. I will say this to you, 
Mr. Peiffer. You feel the weight of the world on your shoulders 
when you sit across from a retiree, and you are trying to help 
them navigate the path to make sure that they are able to make 
it all the way to end of life without running out of money, 
right?
    That burden, and that weight weighs very heavy on 
investment advisors, and so to suggest that--and within that 
industry the penalties are severe. If you do an improper job, 
you will lose your business. You could lose your business. If 
you do an improper job, you could be sued by Mr. Peiffer and 
his law firm.
    There is currently a lot of--that is currently already in 
place to disincentivize the bad actors, and to--and I think 
that there is already innately a benefit. If you do a good job 
more business follows.
    Mr. Ommen. Again, in Iowa, I regulate both securities 
transactions and insurance, so I have the responsibility of 
imposing that sort of punishment, discipline on investment 
advisors, insurance producers, insurance companies, across 
securities broker dealers across those various means of which 
these products are distributed.
    To be frank, I believe that the standards matter a great 
deal, but more important than that is the enforcement. I think 
that is what united us at the NAIC is that we improved our 
rule.
    Chairman Good. I am sorry. The gentleman's time has 
expired, so I need to----
    Mr. Ommen. Thank you.
    Chairman Good. Thank you, Mr. Burlison.
    Mr. Burlison. Thank you.
    Chairman Good. I now recognize Ms. Wild from Pennsylvania 
for 5 minutes.
    Ms. Wild. Thank you very much, Mr. Chairman. Well, I am 
really glad we are having this hearing. I cannot think of 
anything more vital to a large sector of Americans, working 
Americans, than our retirees. In my view, retirement savings 
and investment should be sacred. I suspect the folks sitting 
behind the witnesses from AARP would agree with that, that 
retirement savings are really essential to dignity for our 
seniors and people who have worked a lifetime.
    I am deeply concerned with opposition to a rule that I 
think really goes a long way toward improving life for our 
retirees. Mr. Peiffer, thank you so much for your excellent 
testimony. As I said, I think workers and retirees, and even 
employers who offer the retirement plans deserve to receive 
really sound investment advice that is in their best interest, 
and everybody has used the magic words about best interests.
    Many advisors, I want to hasten to say are honorable 
professionals. This is not a diss on financial advisors. I was 
married to one once, and he still manages my retirement money 
and investments, so but I will say he happens to be fee-only, 
and I think that is an important distinction beyond the scope 
of this hearing.
    The loophole ridden rule dating back to the Ford 
administration allows unscrupulous advisors to put their 
interests ahead of their retirement clients and provide what's 
known as conflicted advice. We have seen and we have heard that 
it costs our retirees billions of dollars of losses, and of 
course, leads to a lot of heartbreak, and harm to them and 
their families.
    I think it is really important to note because we have been 
hearing a lot, and we are going to continue to hear a lot. We 
read in all the testimoneys about these studies or surveys that 
have been done, and I think it is really important for people 
listening to understand that these are not neutral or objective 
studies. They are generally done by large trade associations 
representing brokers and traders.
    These are not studies that are done by, let us say, AARP, 
or other groups that represent retired citizens. These are 
literally lobbying organizations for folks who make money on 
this, and there is nothing wrong with making money. We know 
that in this country, but it is wrong to make money at the 
expense of somebody else, in my view.
    Mr. Peiffer, you have presented some compelling real-world 
examples of people who have been harmed by the status quo. I am 
particularly concerned about the small dollar investors.
    Mr. Peiffer. Yes.
    Ms. Wild. Can you just pick up at that point, and tell us 
what the ramifications are for people who are not born to 
wealth, or born with a silver spoon in their mouth?
    Mr. Peiffer. Absolutely.
    Ms. Wild. Thank you.
    Mr. Peiffer. Small savers are--they are the most 
susceptible to conflicted advice. They can least afford to have 
conflicted advice, and you hear about these studies, and I am 
glad you brought that up because you hear about study after 
study, and they are all industry funded studies.
    None of them are statistically significant, random samples, 
or anything along those lines. What we do know is what happened 
after the last DOL rule. When the industry came in here and all 
over the place, and saying that the sky would fall, and no one 
would be able to get advice. Well----
    Ms. Wild. You mean that the financial professionals would 
lose money?
    Mr. Peiffer. Yes.
    Ms. Wild. They would not be able to make as much?
    Mr. Peiffer. Yes. Well, and that they would not be able to 
serve small savers, but that turned out not to be true.
    Ms. Wild. I am going to stop you for 1 second.
    Mr. Peiffer. Okay.
    Ms. Wild. I am really sorry to do this, but I think it is 
important for people to know that these studies, for instance, 
the SIFMA 1.
    Mr. Peiffer. SIFMA.
    Ms. Wild. That says it was published by Deloitte: was not 
written by Deloitte; they did not verify, validate, or audit 
the information; they were simply the conduit for a broker 
dealer trade association to prepare this report, right?
    Mr. Peiffer. They were a scrivener.
    Ms. Wild. They were scriveners. The same thing with the 
2021 Hispanic Leadership Fund. That one actually, not only was 
done by a group of people in the profession, but it does not 
even apply to the DOL Rule. Is that right?
    Mr. Peiffer. That is correct. It examines the last rule, 
not this one.
    Ms. Wild. Okay. All of them, the NAIFA, the NAIFA survey, 
the FSI Oxford survey, all of them were done by trade 
associations for brokers and dealers, and that is what is being 
relied upon by the other witnesses in this hearing and by my 
colleagues across the aisle to justify trying to defeat the DOL 
Rule. Is that right?
    Mr. Peiffer. That seems correct.
    Ms. Wild. Thank you. With that, I yield back.
    Chairman Good. Thank you, Ms. Wild. Now we will recognize 
Mr. Banks from Indiana for 5 minutes.
    Mr. Banks. Thank you, Mr. Chairman. Mr. Berkowitz, as you 
know the Obama administration tried a very similar rule back in 
2016. I want to read a few quotes from actual retirement 
advisors back then. One said, ``After 36 years in the 
investment business, this proposed rule will force me to fire 
all of my clients who do not have substantial retirement assets 
for investment.''
    Another one warned, ``This minimum fee level will be a 
detriment to the creation of potential plans for many small 
businesses, and likely will result in the termination of plans 
by existing clients. Why in the world would the Biden 
administration try to bring back a regulation that would do 
that?
    Mr. Berkowitz. Thank you for that question. That is a great 
question. It is a head scratcher for me why they are trying to 
do this when we have not--we are not looking at the status quo 
here. We have heard references to the status quo.
    The status quo changed over the last 10 years, last 5 years 
with the SEC and the NAIC, and the Biden administration, and 
the Department of Labor are completely ignoring that, and 
diminishing the value and the viability of those regulations to 
justify this attempt to bring more people under the Department 
of Labor's jurisdiction.
    When, you know, we heard earlier from the Representative 
Courtney, you know, he wants there to be a balance between 
regulation by the states, and regulation by the Department of 
Labor. Well, that is what we are talking about here. The 
balance is when there is a relationship of trust and confidence 
that rises to that level, where ERISA fiduciary status should 
kick in, then the Department of Labor is in place to regulate 
that.
    Short of that, the SEC and the NAIC and the State 
regulators are there to serve in that capacity to ensure that 
the advice is being provided in that client's best interest. 
This rule is simply just not needed. It is a solution in search 
of a problem.
    Mr. Banks. I mean am I wrong? I mean it seems that this 
especially targets small businesses and working-class families 
that are trying to save something to pass on to the next 
generation. I mean why target them? Why would the Biden 
administration be hell bent on targeting working class 
families?
    Mr. Berkowitz. I would like to think that they are not 
targeting them, but that they are the--they are going to be the 
victims. Whether it is intentional or not. Those are the 
people. Those are the small businesses. Those are the small 
savers that are going to find themselves on the outside looking 
in when it comes time to plan for retirement, and figure out 
how to best get to, you know, a secure and dignified golden 
years.
    Mr. Banks. Do you think this rule will result in small 
brokerage firms having to cut their services, and making it 
harder for them to do what they do in advising middle-income, 
middle-class families?
    Mr. Berkowitz. Absolutely. Really what it comes down to is 
what we heard, what we talked about earlier, the difference 
between a best interest standard and a sole interest standard. 
The folks that you are talking about provide advice on a 
commission basis. They get paid only if they complete a 
transaction.
    They have a vested interest in completing the transaction. 
That vested interest does not prevent them from acting in the 
client's best interest, but it does mean that they cannot 
realistically meet a sole interest standard. They cannot 
completely disregard their own interest because they only get 
paid if they complete a transaction.
    In order to avoid that, they are going to have to either 
transition to a fiduciary model, which means they are going to 
have to raise their account minimums, and NAIFA just did a 
survey of their members, whether it is statistically viable or 
not. I am not a statistician, so I cannot speak to that.
    I can tell you that they found from their members that 
right now less than 30 percent have account minimums, and if 
this rule goes into effect that is going to go up to over 70 
percent. These are sizable account minimums, six figure account 
minimums that the average American simply cannot meet. People 
are going to lose access, and it is those small balance savers 
that are going to be the most hard hit.
    Mr. Banks. It screws the people who need the help the most. 
I mean it makes no sense to me, but what type of--I mean in 
that regard, I mean if--if brokerage firms are cutting 
services, or they have to increase their fees. I mean dumb this 
down and play that out. What does that mean for the client?
    Mr. Berkowitz. It means the clients, just like we saw back 
in 2016, are going to be getting letters in the mail from their 
financial institutions saying we are so sorry, but we can no 
longer service your account and provide financial advice or 
guidance, or assistance. If you have transactions that you 
would like us to execute you can submit those, but we cannot--
we cannot serve you in the way of helping you figure out what 
to do.
    Mr. Banks. Yes. I have said it many times before. This 
administration is at war with working-class middle-income 
families in this country who right now are finding it harder 
than ever to save, to makes ends meet, and this is another 
example of it, right? I mean this is pure insanity. With that, 
I yield back.
    Chairman Good. Thank you, Mr. Banks. Now I will recognize 
Ms. Manning from North Carolina for 5 minutes.
    Ms. Manning. Thank you, Mr. Chair. Thank you to our 
witnesses for being here today, and I want to associate myself 
with a comment that was just made by one of my colleagues, 
Representative Wild, who said retirement savings should be 
sacred. They are benefits that people have earned, they are 
critical to allow seniors to live in dignity and for many 
people the most critical issue they grapple with is ensuring 
that they do not outlive their retirement savings.
    I can tell you that is something that my 91-year-old father 
is currently grappling with. For most people who are not 
financial experts, they must rely on retirement advisors to 
help them--meet that critically important goal. Mr. Peiffer, I 
want to thank you for your thoughtful testimony today.
    Often in hearings, we hear from experts who only share 
statistics and figures that are hard for us to understand, and 
certainly difficult for people who watch these hearings to 
understand. They may be important to hear, but it is also 
important for Members of Congress to fully understand who is 
being harmed, who is being taken advantage of, who are the 
victims of the kinds of rules that we are talking about.
    You did us a service by sharing these compelling stories. 
Through the stories you have shared there is a common theme of 
hard-working people who played by the rules, did everything 
right, only to put their trust in bad advisors who wronged 
them. Now their so-called ``golden years'' are not as golden as 
they were hoping they would be.
    I assume you would agree with me that that is the theme of 
those stories?
    Mr. Peiffer. That is the theme of the stories, and that is 
what we see every day, are these people that are just 
absolutely shattered, and the loss of dignity is almost as bad 
as the loss of the money, frankly.
    Ms. Manning. The humiliation of having known that you 
relied on someone you should not have relied upon. I know it is 
too late for the Department of Labor's Retirement Security Rule 
to help the folks that you talked about, but do you think the 
rule would have spared them harm had it been in effect back 
when they were investing their retirement savings?
    Mr. Peiffer. I absolutely think that they would have been 
helped by this rule.
    Ms. Manning. Great. I want to focus the rest of my time on 
clarifying a key point. We have heard a lot of talk about the 
SEC's regulation Best Interests, and the NAIC's Model Rule, and 
it seems that some of my Republican colleagues believe that 
these would be fully sufficient to protect retirement savers.
    I disagree. There is one big gap, at least one big gap, in 
the SEC's Reg. BI and the NAIC's Model Rule, and that is when 
it comes to advise to retirement plan sponsors. Can you talk 
about that for a minute?
    Mr. Peiffer. Sure. As of now, advice that are given to 
retirement plan sponsors, people that are electricians that 
employ other electricians, people that are plumbers that employ 
other plumbers. People that are even that are accountants, that 
employ other accountants. Employers, the advice to them on 
their plan, meaning what the workers can choose from, is not 
covered by a fiduciary duty. I cannot think of anything more 
important to be covered by a fiduciary duty because it impacts 
not just that person, but their workers.
    For instance, if someone was giving me advice, and it was 
on securities, it might be covered by Regulation BI. In my 
capacity, as the owner of my law firm, it would not be covered 
by Regulation BI.
    Ms. Manning. Do most people assume when they go to a 
retirement advisor that that advisor has their best interests 
at heart?
    Mr. Peiffer. Absolutely. I see it every single day. We 
heard a little bit from Mr. Roberts about professional 
salespeople. There is not a single person that has ever come 
into my office that said, you know, this guy was a professional 
salesperson, and introduced himself as such.
    These people trust their advisor, and they do it because 
they were induced to.
    Ms. Manning. According to the Research and Financial 
Services Firm Morning Star, thanks to the Retirement Security 
Rule, workers covered by small plans would save over 55 billion 
dollars in fees in the first 10 years, and over 130 billion 
dollars in the subsequent 10 years.
    Now, there has been a lot of talk about different rules and 
regulations this morning, and in the testimony, but I think we 
need to keep our eye on the ball. The existence of these rules 
is no substitute for the DOL's Retirement Security Rule. In 
fact, gaps still exist making the DOL's Retirement Security 
Rule essential to fully protect workers and small businesses. 
All I can ask in my remaining 7 seconds is--is that right, Mr. 
Peiffer?
    Mr. Peiffer. That is correct.
    Ms. Manning. Thank you very much, and I yield back.
    Chairman Good. Thank you, Ms. Manning. We will now 
recognize Dr. Foxx for 5 minutes.
    Mrs. Foxx. Thank you, Mr. Chairman, and I want to thank our 
witnesses for being here today. Commissioner Ommen, the 
proposed Fiduciary Rule attempts to regulate sales of annuities 
to retirement investors, which is currently regulated by the 
states. The Department of Labor claims its fiduciary proposal 
is necessary to fill loopholes and gaps in the regulations.
    Is there evidence that gaps or loopholes exist, and are 
being exploited to harm constituents?
    Mr. Ommen. No, Madam Chairwoman. The answer to that is no. 
We do not have any data, or actual evidence of harm that there 
are gaps in the NAIC rules because they are relatively new. 
That the states have undertaken an implementation examination 
of all the carriers in the country, but the answer to that 
question is no. It would be premature to suggest there is any 
actual data that our rules are inadequate.
    Mrs. Foxx. Great. I think you would agree with me that the 
proposed Fiduciary Rule is a solution in search of a problem?
    Mr. Ommen. I would agree with that assessment.
    Mrs. Foxx. Thank you. Mr. Roberts, DOL's constantly 
shifting regulatory efforts on what constitutes an investment 
advice fiduciary have created ongoing confusion. How has this 
uncertainty impacted costs and compliance for retirement 
products and services?
    Mr. Roberts. The DOL's shifting positions on this have sent 
compliance costs skyrocketing. Financial institutions and 
professionals who have established business models are on a 
regular basis being asked to re-engineer them, to retool them, 
to come into conformity with exceedingly complex technical 
rules and regulations that seemingly appear out of nowhere.
    The Department's estimates of the costs in my view, are 
dramatically understated. There are tremendous systems, 
programming costs, operational costs, legal compliance costs, 
and all those costs to some extent get passed through. The 
cost-benefit ratio of the zigging and zagging that the 
Department has taken is not productive.
    Mrs. Foxx. Thank you very much. Mr. Berkowitz, the Federal 
Reserve reports that 28 percent of Americans do not have any 
retirement savings. This Committee worked on a bipartisan basis 
to draft and pass Secure 2.0, with the goal of expanding 
retirement savings for the American workforce.
    Would DOL's latest proposed Fiduciary Rule undermine the 
bipartisan efforts of this Committee by reducing access to 
retirement investment products for low-and middle-income 
Americans, and if you--please explain your answer?
    Mr. Berkowitz. Thank you very much, Chair Foxx. Yes. We 
definitely do believe that this will undermine the objectives 
and the goals of the Secure and Secure 2.0 regimes. Thank you 
for your leadership in helping to drive those through Congress 
and getting those over the finish line.
    The Secure Act and Secure 2.0 had numerous provisions that 
are designed to make it easier for retirement savers to access 
and use annuities and other protected lifetime income products. 
They were focused on expanding access, whereas this proposal is 
focused on restricting access.
    Secure Act, for example, established a new safe harbor to 
provide guidance for plan sponsors that are looking to put 
annuities in their plans, so that there is greater clarity 
around the obligations that they have to live up to. There has 
also been changes in Secure 2.0 to the rules governing the use 
of longevity annuities, known as qualifying longevity annuity 
contracts, and many other positive changes.
    By changing the rules about who can provide advice to 
retirement savers by restricting that advice to only those who 
are willing to serve as fiduciaries, you are going to lose the 
ability to access the advice that you need to learn how to take 
advantage of those improvements that were developed through 
Secure and Secure 2.0.
    Mrs. Foxx. Thank you.
    Chairman Good. Thank you, Dr. Foxx. We will now recognize 
Ms. Hayes from Connecticut for 5 minutes.
    Mrs. Hayes. Thank you. Thank you to our witnesses for your 
testimony today, and to our friends from AARP, who I see in the 
audience. Thank you for being here, for amplifying this issue 
all the time. People expect that if you work hard and save 
diligently, you can expect to be able to retire with dignity.
    The retirement process has gotten substantially more 
complex since the current rules were designed. Unfortunately, 
ERISA was enacted nearly 50 years ago and has not been updated 
since. The five-part test used to determine whether someone is 
an investment advice fiduciary under ERISA predates the 401K by 
3 years and widespread investments in IRAs by more than two 
decades.
    Many will need assistance with retirement, especially if 
they have limited savings. It takes tremendous trust to provide 
your personal financial information to someone else and give 
them control over your future by making investments on your 
behalf.
    Mr. Peiffer, in your testimony you pointed to multiple 
studies that showed the vast majority of investors, as many as 
97 percent, already believe their financial professionals were 
also their fiduciaries. How would this rule protect those with 
smaller investment portfolios? In particular, what does it do 
for investors with limited access to professional financial 
advice?
    Mr. Peiffer. Well, it ensures that they get good advice. 
Frankly, the argument that well, the financial services 
industry is just going to stop giving advice to people if they 
cannot give them conflicted advice, or rip them off, is 
offensive to good financial advisors.
    It is not borne out by what happened after the last DOL 
rule. After the last DOL rule, like I said, the industry came 
in and said that everything is going to fall apart and we are 
not going to be able to provide advice to small investors. What 
happened? 82 percent of broker dealers did not reduce their 
services at all.
    When Cetera for instance, the broker dealer opened 
$1,000.00 minimum account. They adapt.
    Mrs. Hayes. I want to be clear. Many financial advisors are 
working in the best interests of their clients. In fact, one 
third of the advisors, including more than 1,500 from my State 
of Connecticut, voluntarily certified as a fiduciary through 
the Certified Financial Planners Board. Many fiduciaries are 
also educators, helping their clients to learn about their 
savings, their investments, and why certain decisions make the 
most sense.
    Mr. Peiffer, can you also describe how the behavior of 
unscrupulous advisors can make it more difficult for all 
professionals to offer the best advice to investors?
    Mr. Peiffer. Sure. If you are living up to a fiduciary 
standard, say as a CFP, a certified financial planner, and you 
have someone down the street that can put their interest in 
making a huge commission over the interest of the retiree of 
living a long and happy retirement, you are on an uneven 
playing field.
    Mrs. Hayes. Thank you. I believe that regardless of income, 
Americans deserve access to retirement investments that are in 
their best interest. We have lots of people who are trying to 
piece together a retirement, and really rely on the savings 
that they have put in to be working for them in their best 
interests.
    We are not talking about large investors who have multiple 
portfolios and retirement is not an issue. It is the people who 
work every day and put away little by little in anticipation of 
retirement. This rule is long overdue, an important step toward 
ensuring that every American can retire with dignity. Thank you 
all for your time, and for your comments, and with that, I 
yield back.
    Chairman Good. Thank you, Ms. Hayes. Now will recognize my 
good friend from Virginia, Mr. Scott, for 5 minutes.
    Mr. Scott. Thank you, Mr. Chairman. Mr. Peiffer, we have 
had a general discussion. I think it is important to note what 
we are talking about. Somebody who had $100,000.00 to invest, 
and the fees were 1 percent, how would that differ if you got a 
fund that charged only .1 percent over 10 years?
    Mr. Peiffer. Well, it is an enormous difference, and it is 
the difference between being able to retire a year early, or 
not being able to retire, or 2 years early. If you compound 
that over 20, 30 years of investment, it is a tremendous, 
hundreds of thousands of dollars in difference.
    Mr. Scott. If the broker were able to get a higher fee for 
putting you in a 1 percent fund, rather than a .1 percent fund, 
and some of these are like S&P 500, so you are getting the same 
returns, that would be the conflicted advice we are talking 
about. Is that right?
    Mr. Peiffer. That is right. It does not sound like much 
when you talk about .1 percent and 1 percent, what is 1 percent 
between friends? Well, it is the difference between being able 
to retire or not being able to retire. Down in Louisiana, where 
I am from, they call that death by 1,000 duck bites.
    You just ultimately do not get to where you need to be.
    Mr. Scott. Thank you. Mr. Ommen, you indicated that 42 
states have enacted the Best Interest Standard. How does that 
differ from the Biden Rule in terms of being able to provide 
conflicted advice?
    Mr. Ommen. The 42 states that have adopted it is not the 
top end of that, but I think your question relates to the 
issues surrounding compensation, and how it is that the states 
chose to treat compensation. We do believe, as a matter of 
principle, that compensation of any structure will present 
conflicts. I mean if it has a fee-based structure, it still can 
present conflicts. We viewed it as to permit the wide 
distribution that there would be good and accurate disclosure 
with regards to conflict states.
    Mr. Scott. Well, the conflict is that you can be put in a 1 
percent fund or a .1 percent fund. If you make more money 
gouging the client, that has a conflict of interest. You should 
have put them in a better deal. Is that legal in the 42 states?
    Mr. Ommen. Well, I think what you are referring to now is 
not necessarily an annuity transaction. It sounds to me like 
what you are describing is a fund, is a mutual fund, which 
would be under the securities regiment, and I as the State 
insurance regulator also have that authority, but I do not 
think that that applies to annuities in the same manner.
    Mr. Scott. Well, Mr. Peiffer, are annuities covered by any 
of these rules?
    Mr. Peiffer. Well, they would be covered by the DOL Rule, 
and it is the same deal. The commission paid on annuity, is 
directly related to how good or bad it is for the investor. The 
higher the commission, the worse it is for the investor. The 
longer the surrender period, the higher the costs, and so it is 
absolutely directly related.
    Mr. Ommen. May I now explain now that I understand.
    Mr. Scott. The gentleman.
    Mr. Ommen. Our rule does deal with that. It deals with it 
in terms of the costs associated with that product because 
often times what you described as fees, are built within the 
structure of the contract. Under our best interest requirement, 
that is appropriate and required consideration to make sure 
that the consumers' interests are first and foremost.
    Mr. Scott. The broker could not put the person in the 1 
percent fund and get a higher commission, rather than the .1 
percent fund and get a lower commission?
    Mr. Ommen. Again, sometimes costs--your example again, I 
would say the answer to that would be no. They should not. 
Again, some of these contracts have other features, so it is 
hard for me to give you an absolute answer. What is clear in 
our rule is that the consumers interests, including those 
issues concerning costs, must be primary.
    Mr. Peiffer. It is just not the same standard. Of course, 
we talk about it being in solely in the best interest of the 
retiree. Of course, it should be solely in the interest of the 
retiree. It is the most important decision that any retiree 
could possibly make. Any person, it is their most important 
financial decision, and it deserves the protection of the 
highest duty known to law under ERISA, which is what the DOL 
rule does.
    Mr. Scott. Mr. Peiffer, in the last few seconds, what 
happens to services to be provided, account minimums, and that 
kind of thing?
    Mr. Peiffer. Well, we have like I said, real world examples 
after the last DOL Rule and with Reg. BI, and small savers are 
still able to access financial services advice.
    Mr. Scott. Thank you, Mr. Chairman.
    Chairman Good. Thank you, Mr. Scott. We now recognize----
    Mr. DeSaulnier. Yes.
    Chairman Good [continuing]. Mr. DeSaulnier for 5 minutes.
    Mr. DeSaulnier. It is an old comedy routine. It is probably 
appropriate for this hearing. Mr. Peiffer, we have talked, and 
we have heard about this is a solution searching for a problem. 
Clearly your experience does not speak to that. I look at this 
consistent with your opening comments that we are not after a 
class of people, we are after bad behavior amongst that.
    As a former small business owner, it always bothered me 
that I was competing against people who were not abiding by the 
rules and were being more aggressive. Could you speak to that a 
little bit about in your personal experience and professional 
experience, how there is a problem out there that we are trying 
to address in a manner that is very targeted and efficient in 
terms of a rulemaking, the Biden administration Rule.
    Mr. Peiffer. Absolutely. There are a lot of good financial 
advisors out there that are trying to do the right thing, that 
live up to a fiduciary duty voluntarily already. There are 
those that do not put the client's interest first, and this is 
an extremely narrowly targeted rule that gets at people that 
call themselves fiduciaries, that have control over accounts, 
or give advice, specifically on the retirement.
    This is not a solution in search of a problem. This is a 
problem that needs a definite solution, and this DOL Rule gives 
that solution.
    Mr. DeSaulnier. Yes. I was never married to a financial 
advisor, unlike my colleague, Ms. Wild, but I have heard from 
friends in my district, and around the Bay area in Northern 
California. I could see that they are concerned because they 
are worried about over regulation, especially when it is a 
small firm, an individual firm.
    It is complicated, and they assume the worst. Could you 
speak a little bit about that again to the targeted, that 
people who are playing by the rules, dealing with the rules in 
good faith, which I think we all agree we want for the 
industry's sake, should not worry about this, and we will be 
watching DOL if this rule were to be effected and sustained.
    I assume it is going to be challenged, as the previous rule 
was. That this is what we want. We want to get rid of the bad 
behavior, which if it is done right, and I have concerns about 
that. I think this rule is if it is done right, it benefits 
everybody who wants to abide by the rules.
    Mr. Peiffer. I think that is right. I mean there is a lot 
of onerous rules for lawyers, and nothing makes me more angry 
than scumbag lawyers that break those rules, frankly, because 
we do not. They should not, and they make all of us look bad. 
Every financial advisor should have a duty to put their 
clients' interests first, especially with something that is so 
sacred as retirement money.
    It is all they got, most of these people. They really, they 
have this, and maybe they have got a little bit of equity in 
their house. That is what they have to live out the rest of 
their lives. That is what they have so they do not have to rely 
on their children, after a lifetime of hard work and doing the 
right thing.
    Mr. DeSaulnier. The Biden administration, it strikes me--
has worked very hard to anticipate this being challenged again. 
In your opinion, as opposed to some of the comments I have 
heard that this is just the Obama administration's Rule all 
over again, it is not.
    Mr. Peiffer. No.
    Mr. DeSaulnier. It is very much being mindful of what the 
Fifth Circuit said and ruled and anticipates another challenge.
    Mr. Peiffer. Absolutely. It is not like the Department of 
Labor is engaging in rulemaking for the fun of it. They are 
doing it because they want to address a serious problem, and 
they want to do it in a serious way that addressed the Fifth 
Circuit's problems with the rule, and they did that.
    They do not have a contract. They do not have a contract 
requirement in this. It has a much more narrow definition of 
who is a fiduciary. I think they have addressed the Fifth 
Circuit's problems.
    Mr. DeSaulnier. If this rule were not implemented, what do 
you see in the near future? We have heard what I would think is 
fairly hyperbolic language about what might happen if this rule 
is applied. What do you think if it does not? If we continue 
this way, is it going to get worse, or just?
    Mr. Peiffer. Well, it is absolutely going to get worse 
because there is really, the defined benefit pension is going 
away. Everyone has got to rely on 401K's, and you expect people 
that were electricians, or plumbers, or even brain surgeons 
that I have represented, to then become portfolio managers. 
They cannot do it, and they need advice.
    In order for that advice to be good advice, it needs to be 
non-conflicted advice.
    Mr. DeSaulnier. Thank you very much. I yield back.
    Chairman Good. Thank you to our Ranking Member. Now we will 
recognize Ms. Bonamici from Oregon for 5 minutes.
    Ms. Bonamici. Thank you, Mr. Chairman and Ranking Member. 
Thank you for allowing me to waive on to the Subcommittee. This 
is not a new issue to the Committee. We have talked about it a 
lot. I want to go to the big picture for a minute here. I am 
not married to a financial advisor, but in my former work as a 
consumer protection attorney, I dealt with people, individuals, 
families, who had invested money based on trust and lost it.
    Different situations, not necessarily with a fiduciary 
rule, but in situations where for example, my clients spent 
their whole life savings to buy a franchise because the 
franchisor assured them, and they relied on that, that their 
franchise would be successful. Situations where people took a 
second mortgage on their home because they were promised that 
that would automatically refinance, and then they lost their 
homes.
    Mr. Peiffer, your testimony is really poignant in 
describing these stories. This is a consumer protection issue, 
and I am a bit baffled by the argument that I heard on the 
other side of the aisle that this going to hurt individuals and 
working families. This is designed to help them.
    I know some of my colleagues were not born in 1974, but I 
was around then, and things have changed since then. It looks 
very different in the financial market. 401K's did not exist. 
People like my dad had a pension, and a pension that was going 
to last their lifetime. It is very different today.
    To the extent that workers participate in a retirement 
savings plan, it is most likely a defined contribution plan, 
and they have to manage it. Like you said, make investment 
decisions. This is not to say that people are not smart or that 
we are looking down on them. These are complicated products.
    The difference between a fixed annuity and a variable, 
there is just a lot of complication in these products that 
people who do not have the background need to rely on someone 
they trust. As you said in your testimony, Mr. Peiffer, that 
most people believe that their advisor is acting as a 
fiduciary.
    The advisors build that trust for a reason because they are 
holding themselves out to that. I know that AARP study said 
about 89 percent of people over 50, and one study said about 97 
percent. This is the trust that is established with their life 
savings.
    Again, a lot has changed, but we still have the same rule 
from 1974 when the products and the world was much less 
complicated. I also want to reiterate that most advisors are 
doing the right thing. We are not criticizing or saying all 
financial advisers are cheating their consumer. That is not the 
case.
    There are some who are taking advantage. We know that. We 
see it. You see it in your clients, Mr. Peiffer. Your written 
testimony did an excellent job in talking about the harm that 
workers and their families face, and you know, the suicides, 
the suicidal ideation because people feel they have lost their 
life savings. It is really tragic, and this is again, a rule 
that is designed to protect consumers.
    I know we heard in the last rounds the sky was going to 
fall, and it did not. I also want to followup on Mr. Courtney's 
point about Mr. Ommen, your quote that the DOL overstepped its 
statutory authority and that rests with Congress not the DOL. I 
agree with Mr. Courtney, that that is just not the case. For 
years, the Department of Labor has appropriately exercised 
clear statutory authority to regulate investment advice 
affecting retirement savers.
    We need that. It started in 1975 with the regulation, you 
know, still on the books. Continues through the issuance of the 
Biden administration's proposed rule. Mr. Peiffer, would you 
agree that the Department of Labor has clear and explicit 
statutory authority under ERISA to promulgate this rule?
    Mr. Peiffer. Absolutely. That is what they are there for.
    Ms. Bonamici. Exactly. That is what they are there for, 
right? Some have mentioned the SEC's regulation Best Interest 
and the National Association of Insurance Commissioner's Model 
Rule would be sufficient. Mr. Peiffer, in my remaining time, 
will you please explain how neither of these is an acceptable 
substitute for the Department of Labor's Retirement Security 
Rule?
    Mr. Peiffer. Absolutely. Regulation BI does not cover 
advice to plan sponsors, nor does it cover non-securities, and 
the Model Rule for the State insurance Commissioners does not 
cover compensation as a conflict, and compensation is the No. 1 
conflict that advisors have with their clients.
    Ms. Bonamici. If this rule were in place, advisors who were 
following the rule would still be able to make a living. Is 
that correct?
    Mr. Peiffer. Can and would.
    Ms. Bonamici. Thank you very much. I yield back.
    Chairman Good. Thank you, Ms. Bonamici. I now recognize 
myself for 5 minutes. Mr. Roberts, throughout today's hearing a 
number of different terms have been used to describe standards 
that financial advisors have to follow, including best 
interest, fiduciary and sole interests. Can you explain the 
distinction between these standards, and whether the best 
interest standard is sufficiently protective?
    Mr. Roberts. I am so glad you asked that question, Chairman 
because we are circling around this very issue, and I think we 
are missing each other a little bit on this one. Mr. Peiffer, 
in his testimony, repeatedly talked about how under the DOL 
standard financial professionals would be required to act 
solely in the interest.
    We repeatedly heard references to any compensation, any 
whatsoever being ``conflicted advice.'' Well, that is a 
fiduciary standard. A fiduciary has a conflict whenever he or 
she has a financial interest. Now the Department of Labor 
proposes an exemption that will relieve a prohibited 
transaction rule, and at the bottom of their exemption they 
write that they have written in every single one, nothing in 
this exemption provides any relief to the requirement in ERISA 
that one must act--a fiduciary must act solely in the interest.
    The question is raised folks, do professional salespeople 
get to have any interest? Are they permitted to be compensated? 
Mr. Peiffer says yes. On the other hand, Mr. Peiffer says they 
must act solely in the interest, and that they are conflicted 
whenever they are compensated.
    Versus a best interest standard. A best interest standard, 
NAIC Reg. 275 says that the mere fact that a professional sales 
person receives some compensation in and of itself, is not a 
conflict with their best interest obligation. It is so 
important to realize that there is a best interest obligation 
in that regulation.
    They are not absolved from acting in the best interest of 
their clients. They are duty bound to do so. They are duty 
bound to consider cost, and whether or not the product, and the 
cost features the product are a match for the consumer's needs. 
I think, you know, a best interest standard is an appropriate 
standard for a professional sales person.
    A fiduciary standard, one which would deprive the sales 
person of having any financial interest in his or her 
activities, is inappropriate. I did--I also want to address, 
you know, there is a great deal of umbrage being expressed 
about well, how dare anyone suggest that the Department of 
Labor not have the full authority to regulate the securities 
industries and the insurance industries.
    The Fifth Circuit decision made exactly that point, that 
Congress had reserved regulation of the securities industry to 
the SEC. It is reserved regulation of the insurance industry to 
the states, and the DOL has the power to regulate the operation 
of plans. There is some overlap amongst the three, but they 
belong in separate regulatory spheres, thank you.
    Chairman Good. Thank you for bringing some wonderful 
common-sense perspective to that. I appreciate you making, you 
know, you could argue that every business broken down to the 
very base level is in conflict with every consumer's interest. 
If you have a restaurant, when the customer walks in he wants 
to get the absolute best meal, the absolute best price, with 
the absolute best service.
    The business wants to make money off the transaction, but 
they also have a--the business has a shared interest that they 
want to make that customer happy, so that customer comes back 
again and again, and tells their friends, and enjoys that 
experience. They want it to be a healthy meal.
    They want it to be a satisfying meal, so it really is a 
devoid of understanding on the other side of that, that there 
is a long-term shared best interest for businesses that want to 
succeed and thrive and help those whom they serve. Do you 
believe that the State, the SEC's regulation best interest and 
the state's rules are effectively protecting retirement 
investors?
    Mr. Roberts. I do. I do. I mean and we have been fortunate 
to hear from Commissioner Ommen this morning, and Commissioner 
Ommen has shared with us how his office protects consumer 
interests actively, weeds out and disciplines bad actors for 
not adhering to a best interest standard of conduct, as does 
the SEC and FINRA on the securities side.
    One point Mr. Ommen made also in his written testimony is 
that bad actors can be found in the fiduciary space. Bernie 
Madoff, for example, was a so-called unconflicted fiduciary.
    Chairman Good. Well said. I would suggest, I was going to 
ask you, but the costs of implementing the proposal, the 
proposed Fiduciary Rule is not justified. With that, I am out 
of time, and so I am going to recognize our Ranking Member, Mr. 
DeSaulnier, for a closing statement.
    Mr. DeSaulnier. Thank you. I want to thank the witnesses, 
and I also want to thank the Chairman for the reference to the 
restaurant business. As he knows, I used to be in the 
restaurant business, I use to own them, but being from the Bay, 
San Francisco Bay area, I just did it for my masochistic 
fulfillment until I became a politician.
    The analogy is a good one. I do think, you know, this is 
well, Madison, one of my favorite quotes from Madison was that 
if people were angels there would be no need for government. I 
think this is sort of the sentiment of what we are getting at 
in good faith from all the witnesses, is how do we make people 
professionally get the standards whether that conflict is based 
on enumeration, or other beliefs-.
    We are trying to get that. I really believe the 
administration particularly as a result of the Fifth Circuit's 
decisions, is doing that in a targeted way. Mr. Peiffer, I 
would ask you for the record, to respond to some of the, I will 
not use your termination about lawyers that you used earlier, 
and I am not relating this to anyone on the panel, but maybe 
you could submit for the record a response to what we heard 
from Mr. Roberts, versus the technical legal aspects.
    You do not need to respond now, this is my closing, so you 
could submit it for the record, and our staff will be happy to 
help you with that. Let me just conclude with that I really 
hope we can get this right. I believe this is right. As I said 
earlier, I do not believe in doing regulation for regulation's 
sake, which I have heard from the republican witnesses.
    We just want to get at the bad behavior, and I have heard 
that, as I have said, from friends and financial advisors in my 
district, both on this rule and the Obama Rule. What we are 
really looking for, and I disagree with Mr. Banks in this 
regard, from my perspective, and our perspective, and the Biden 
administration's perspective, and DOL's perspective, is that a 
lot of workers are suffering right now.
    There is more pressure on middle income people than ever, 
and thanks for all our supporters of this regulation in the 
room. I would love to go to the AARP store after to get a 
jacket, so I can appropriately be affiliated with you, besides 
my age. The people who are being abused have less disposable 
income. A lot of people in my area are--in my generation--are 
completely dependent on their home investment for their 
retirement.
    Subsequently, to helping their kids with that, so this rule 
getting right and protecting their retirement is really 
important. Neither the SEC's regulation, in our opinion, on 
best interest, nor the far weaker NAIC Rule again, in our model 
rule comes close to fixing the problem. In my estimation, the 
Biden administration's proposed Retirement Security Rule is 
necessary, narrowly tailored, and responsive to the Fifth 
Circuit's decision.
    This rule is not the same as the Obama era Fiduciary Rule, 
and the Department of Labor acted well within its statutory 
authority under ERISA when proposing it. The Biden 
administration proposed rule will significantly reduce costs to 
help small businesses, including restaurants, and benefit small 
savers who are most vulnerable to conflicted advice.
    There is no credible study on this rule that suggests 
otherwise. The proposed rule will level the playing field to 
ensure that workers, retirees, and plan sponsors receive advice 
that is in their best interest. That is what they expect and 
deserve. I very much support this Biden administration's 
Retirement Security Rule, and encourage the Department of Labor 
to promptly finalize it.
    Finally, I ask unanimous consent to enter into the record 
statements from our friends at AARP and the Consumer Federation 
of America in support of the Retirement Security Rule. Thank 
you, Mr. Chairman, and I yield back the balance of my time.
    Chairman Good. Without objection.
    [The information of Mr. DeSaulnier follows:]
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    Chairman Good. Thank you, Mr. DeSaulnier. In my experience, 
from 17 years in the financial services industry on the lending 
side, mind you, but almost no new regulation that I saw over my 
17 years, almost no mandate, no rule from the Federal 
Government, often for the State government as well, was truly 
in the consumer's best interest.
    Whether it is the Privacy Rule, I was working in the 
industry when we had the new privacy rule, where now every 
year, you have got to send every consumer in the country the 
stacks of paper to throw away, telling them what their privacy 
rights are. The redundancy of paperwork and repetitive 
requirements, increased pass-through costs, from an 
administration by the way, that says literally the President 
said, ``Don't pass on your increased costs to your consumers.'' 
``Don't pass those on to your customer.''
    When your costs go up don't pass them on to the customer. 
Having no understanding, after 50 years in government where a 
business where an organization gets their revenues, is the only 
way to pass through to their customers.
    The unnecessary delays and less efficiency that results 
from these mandates, regulations and rules, the explosion as a 
result of the compliance and legal departments, or what we used 
to call the business prevention department, that small firms by 
the way cannot afford, like the large firms can.
    I worked for a Fortune 100 company that could afford those, 
but I guess it did provide job growth and security for the 
examiners and the auditors that I had to enforce these things. 
Federal rules and regulations are costing consumers thousands 
of dollars a year. It has exploded, particularly in the last 3 
years. Who does that hurt most?
    These are hidden taxes, hidden fees that are regressive in 
nature, that do not hurt the big investor, but they do hurt the 
small savers, the small investors, the seniors, the regular 
income folks and so forth. Bureaucrats, and they do not know 
best.
    Ronald Reagan famously said you know, the nine scariest 
words in the English language was hey, I am here from the 
Federal Government, I am here to help you. That is so rarely 
the case. Business and industry professionals have again, long-
term shared interests perspectives.
    Truly one of the best for those who they assist, those whom 
they serve. They recognize that everybody wins when that is the 
case, and they want to stay in business for a long time, and 
have satisfied repeat clients and consumers. We should not 
punish everyone. Quality firms and professionals should not be 
punished, and the costs that impair--the increased costs and 
fees and the impaired service for investors, that should not 
happen.
    Everyone should not be punished because of the very few bad 
actors that helps lawyers enrich themselves via class action 
lawsuits by the way. The Biden administration's fiduciary rule 
purports to address unfair sales practices by retirement 
advisors. However, more overregulation industry is not the 
answer.
    Implementing the proposed Fiduciary Rule would disrupt an 
industry that is already making progress in protecting 
consumers. In fact, in the last few years the SEC, and 42 
states have implemented new standards to protect consumer 
interests. The rule discussed today is a classic case of heavy-
handed regulatory overreach by the Biden administration.
    Americans of all income levels should be free to choose 
sound financial advice on how to best save for their 
retirement. It really is offensive, the contempt for the 
consumer. If you are low-income, or if you are regular income, 
or you are blue collar, then you just do not know how to make 
choices for yourself.
    That's really an offensive thing for some to suggest. We 
know this rule will negatively impact missions of Americans' 
ability to receive the investment advice that they need, so I 
urge the Department of Labor to take note of our hearing and 
withdraw the rule. Without objection, there being no further 
business, the Committee stands adjourned.
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    [Whereupon, at 12:08 p.m., the subcommittee was adjourned.]

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