[Congressional Record Volume 155, Number 58 (Tuesday, April 21, 2009)]
[Extensions of Remarks]
[Pages E914-E915]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  INTRODUCTION OF THE CONFLICTED INVESTMENT ADVICE PROHIBITION ACT OF 
                                  2009

                                 ______
                                 

                         HON. ROBERT E. ANDREWS

                             of new jersey

                    in the house of representatives

                        Tuesday, April 21, 2009

  Mr. ANDREWS. Madam Speaker, I rise today to introduce the 
``Conflicted Investment Advice Prohibition Act of 2009, CIAPA, which 
would restore the Employee Retirement Income Security Act's, ERISA, 
prohibition on self-interested investment advisers providing advice to 
employer-sponsored retirement accounts; thereby, safeguarding the 
retirement savings of millions of hardworking Americans.
  On the eve of the inauguration of President Barack Obama, the Bush 
administration attempted to finalize a regulation concerning the 
Employee Retirement Income Security Act, ERISA, that raised substantial 
questions of law and policy. Essentially, the final rule issued would 
have allowed conflicted financial advice to workers with regard to 
their 401(k) and other types of defined contribution plans. 
Fortunately, thanks to letters of opposition from Chairman Miller and 
me, as well as several other Members of Congress, as well as consumer 
advocacy groups and several financial industry insiders who serve in 
the interest of investors, the Obama administration has delayed the 
effective date of the regulation for further examination of its intent.
  I believe in the value of providing American workers with access to 
investment advice, so long as the advice is independent and free from 
conflict--serving in the interest of the worker, rather than the 
interest of the financial advisor. During a time where American workers 
have already lost $2 trillion in assets due to last year's market 
downturn, exposing their hard-earned retirement savings to greater risk 
by allowing advisers to offer them conflicted

[[Page E915]]

advice is irresponsible and imprudent. During consideration of the 
Pension Protection Act of 2006, many of my colleagues were well 
intended with respect to ensuring that if workers were to receive 
investment advice with respect to their retirement savings, it would be 
independent. Despite their good intentions, the process of the bill's 
consideration created a statutory loophole; at the end of the 
regulatory process, conflicted advice could be offered to workers.
  In lieu of exposing workers to conflicted investment advice, CIAPA 
would permit independent investment advisers to provide advice to 
workers regarding their retirement goals. Furthermore, it would 
maintain the allowance of the computer model arrangement so long as an 
independent expert or agency certifies the model.
  I strongly encourage my colleagues to cosponsor and support the 
Conflicted Investment Advice Prohibition Act of 2009.

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