[Congressional Record Volume 161, Number 158 (Tuesday, October 27, 2015)]
[House]
[Pages H7231-H7243]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                     RETAIL INVESTOR PROTECTION ACT

  Mr. HENSARLING. Mr. Speaker, pursuant to House Resolution 491, I call 
up the bill (H.R. 1090) to amend the Securities Exchange Act of 1934 to 
provide protections for retail customers, and for other purposes, and 
ask for its immediate consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Pursuant to House Resolution 491, an 
amendment in the nature of a substitute consisting of the text of Rules 
Committee Print 114-31 is adopted, and the bill, as amended, is 
considered read.
  The text of the bill, as amended, is as follows:

                               H.R. 1090

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Retail Investor Protection 
     Act''.

     SEC. 2. STAY ON RULES DEFINING CERTAIN FIDUCIARIES.

       After the date of enactment of this Act, the Secretary of 
     Labor shall not prescribe any regulation under the Employee 
     Retirement Income Security Act of 1974 (29 U.S.C. 1001 et 
     seq.) defining the circumstances under which an individual is 
     considered a fiduciary until the date that is 60 days after 
     the Securities and Exchange Commission issues a final rule 
     relating to standards of conduct for brokers and dealers 
     pursuant to the second subsection (k) of section 15 of the 
     Securities Exchange Act of 1934 (15 U.S.C. 78o(k)).

     SEC. 3. AMENDMENTS TO THE SECURITIES EXCHANGE ACT OF 1934.

       The second subsection (k) of section 15 of the Securities 
     Exchange Act of 1934 (15 U.S.C. 78o(k)), as added by section 
     913(g)(1) of the Dodd-Frank Wall Street Reform and Consumer 
     Protection Act (12 U.S.C. 5301 et seq.), is amended by adding 
     at the end the following:
       ``(3) Requirements prior to rulemaking.--The Commission 
     shall not promulgate a rule pursuant to paragraph (1) 
     before--
       ``(A) providing a report to the Committee on Financial 
     Services of the House of Representatives and the Committee on 
     Banking, Housing, and Urban Affairs of the Senate describing 
     whether--
       ``(i) retail investors (and such other customers as the 
     Commission may provide) are being harmed due to brokers or 
     dealers operating under different standards of conduct than 
     those that apply to investment advisors under section 211 of 
     the Investment Advisers Act of 1940 (15 U.S.C. 80b-11);
       ``(ii) alternative remedies will reduce any confusion or 
     harm to retail investors due to brokers or dealers operating 
     under different standards of conduct than those standards 
     that apply to investment advisors under section 211 of the 
     Investment Advisers Act of 1940 (15 U.S.C. 80b-11), 
     including--

       ``(I) simplifying the titles used by brokers, dealers, and 
     investment advisers; and
       ``(II) enhancing disclosure surrounding the different 
     standards of conduct currently applicable to brokers, 
     dealers, and investment advisers;

       ``(iii) the adoption of a uniform fiduciary standard of 
     conduct for brokers, dealers, and investment advisors would 
     adversely impact the commissions of brokers and dealers, the 
     availability of proprietary products offered by brokers and 
     dealers, and the ability of brokers and dealers to engage in 
     principal transactions with customers; and
       ``(iv) the adoption of a uniform fiduciary standard of 
     conduct for brokers or dealers and investment advisors would 
     adversely impact retail investor access to personalized and 
     cost-effective investment advice, recommendations about 
     securities, or the availability of such advice and 
     recommendations.
       ``(4) Economic analysis.--The Commission's conclusions 
     contained in the report described in paragraph (3) shall be 
     supported by economic analysis.
       ``(5) Requirements for promulgating a rule.--The Commission 
     shall publish in the Federal Register alongside the rule 
     promulgated pursuant to paragraph (1) formal findings that 
     such rule would reduce confusion or harm to retail customers 
     (and such other customers as the Commission may by rule 
     provide) due to different standards of conduct applicable to 
     brokers, dealers, and investment advisors.
       ``(6) Requirements under investment advisers act of 1940.--
     In proposing rules under paragraph (1) for brokers or 
     dealers, the Commission shall consider the differences in the 
     registration, supervision, and examination requirements 
     applicable to brokers, dealers, and investment advisors.''.

  The SPEAKER pro tempore. After 1 hour of debate on the bill, as 
amended, it shall be in order to consider the further amendment printed 
in House Report 114-313, if offered by the gentleman from Massachusetts 
(Mr. Lynch), or his designee, which shall be considered read, and shall 
be separately debatable for 10 minutes equally divided and controlled 
by the proponent and an opponent.
  The gentleman from Texas (Mr. Hensarling) and the gentlewoman from 
California (Ms. Maxine Waters) each will control 30 minutes.
  The Chair recognizes the gentleman from Texas.


                             General Leave

  Mr. HENSARLING. Mr. Speaker, I ask unanimous consent that all Members 
may have 5 legislative days within which to revise and extend their 
remarks and submit extraneous materials on the bill under 
consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may 
consume simply to say, Mr. Speaker, at one time this administration 
told us, if you liked your doctor, you could keep them. Now this same 
administration is telling us, if you like your financial adviser, you 
can keep them. The first promise was broken, and now they are in the 
process of breaking the second promise due to something called the 
Department of Labor fiduciary rule.
  It will take away investment advice from hundreds of thousands, if 
not millions of low- and moderate-income people all around the Nation 
who rely upon this advice to save for retirement. This is something 
that should be considered by the Securities and Exchange Commission, 
and there has been outstanding work by the gentlewoman from Missouri 
(Mrs. Wagner) who has been at the forefront of protecting retail 
investors, the small moms and pops planning for their retirement.
  Mr. Speaker, I yield 5 minutes to the gentlewoman from Missouri (Mrs. 
Wagner).

                              {time}  1630

  Mrs. WAGNER. I would like to thank Chairman Hensarling and 
Subcommittee Chair Garrett for their support on this tremendous issue.
  Mr. Speaker, today I am pleased to stand before the House as the 
sponsor of H.R. 1090, the Retail Investor Protection Act. This 
important legislation that I have sponsored and worked on for 3 long 
years now came about after my colleagues on the Financial Services 
Committee and I, along with Member of Congress on both sides of the 
aisle saw the potential negative effects that this rulemaking from the 
Department of Labor could have on millions of Americans seeking advice 
on how to invest their retirement savings.
  For that reason, we felt it was important to put the Securities and 
Exchange Commission--the primary and expert regulator for these 
financial professionals--in charge of studying and writing the rules on 
this issue. This isn't such a radical idea. In fact, this is what 
Congress intended when they included section 913 in the Dodd-Frank 
financial reform bill.
  Mr. Speaker, the same legislation received the support of 30 House 
Democrats last Congress, and, once again, I hope that they heed the 
concerns and the warnings that their constituents have provided them 
about the dire consequences this rule will have on Americans' 
retirement savings.
  Make no mistake. There is a savings crisis in this country. About 
half of all households age 55 and over have no retirement savings at 
all. How does this happen?
  Unfortunately, for many people, like that single mother of two who 
gets paid on the 15th and 30th of each

[[Page H7232]]

month, there is just too much month at the end of the money after 
paying for mortgages, groceries, medical bills, and other expenses, and 
saving for retirement ultimately gets pushed off until the next month 
and the next month and so on.
  For many American households, a trusted financial adviser is the key 
link to helping them see the benefits in saving early and helping them 
realize how to save and grow their investment. The vast majority of 
those financial professionals already provide advice and 
recommendations that are in the best interest--the best interest--of 
their clients.
  Unfortunately, this rulemaking from the Department of Labor could 
potentially cut access, limit choice, and raise costs for that kind of 
financial advice, putting the goal of retirement even further out of 
reach.
  The Department of Labor states that this rule simply would require 
financial advisers to act in the best interests of their customers. 
Well, who would argue with that? Unfortunately, when you start to get 
into the over 1,000 pages of regulatory text with the exemptions and 
addendums, it becomes clear that it isn't quite that simple.
  The increased compliance burdens and further legal liability that 
will be required under this regulation will make it very difficult for 
many brokers to continue servicing small accounts, which predominantly 
belong to low- and middle-income Americans who are just starting to 
save and haven't built up their retirement nest egg.
  Mr. Speaker, 98 percent of all IRAs with less than $25,000 are in a 
brokerage relationship today. For that reason, this rule will actually 
hurt the very people that it aims to protect. We must not play politics 
with their retirement savings, and that is what this administration is 
doing.
  We have already seen this happen in the United Kingdom. They enacted 
a similar regulation in 2013, and we have seen since then over 300,000 
clients dropped by their financial advisers because their account 
balances were too small.
  Now the U.K. Government is launching an investigation into the 
``advice gap'' that exists for those people who do not have significant 
wealth. With this regulation from the Department of Labor, the same 
thing will happen here in the United States of America where there will 
be two different classes of investors, those who can afford financial 
advice and those who cannot.
  Mr. Speaker, this is not a Wall Street issue. This is as Main Street 
as it gets. Washington should not be making it more difficult for 
Americans to save for retirement. Instead, we need to empower people to 
earn more and save more and have choices for where to get their help in 
making their financial decisions. Unfortunately, the Department of 
Labor is following along with everything else we have seen under the 
Obama administration, a top-down, Washington-knows-best-for-you 
government, whether it is what you see in your health care that you 
need, the food that you can eat, and now whom you can talk to for the 
financial advice for your retirement savings.
  According to President Obama, Senator Elizabeth Warren, and now even 
Secretary Hillary Clinton--who are all big supporters of this DOL 
fiduciary rule--the only person whom you actually need to be protected 
from ultimately is yourself. I strongly disagree. I give the American 
people a lot more credit than that, and I refuse to stand by and let 
this administration advance another onerous regulation that ultimately 
takes your freedoms, makes decisions for you, and brings us closer to a 
government-planned life.
  Mr. Speaker, I strongly support H.R. 1090, the Retail Investor 
Protection Act, and I urge its passage.
  Ms. MAXINE WATERS of California. Mr. Chairman, I yield myself such 
time as I may consume.
  Mr. Speaker, H.R. 1090 would halt the Department of Labor's ongoing 
efforts to protect American retirement savers from investment advice 
that conflicts with their best interests.
  The bill would prohibit the Department from promulgating any rule on 
the issue until 60 days after the Securities and Exchange Commission 
finalizes its own fiduciary rule for investment advisers and broker 
dealers.
  The bill would then delay the SEC's long overdue rulemaking by 
requiring the Commission to first report to Congress a separate 
economic analysis that, among other things, considers how a new 
standard would affect a broker's profit.
  These delays are unacceptable and ignore the real issue that the 
Department is trying to address: conflicted retirement investment 
advice that costs our Nation's workers and retirees an estimated $17 
billion a year.
  The Department's rulemaking would do so by requiring persons 
providing retirement advice to put the interests of their clients ahead 
of their own and abide by a fiduciary duty, the same duty that we 
expect from our doctors, lawyers, and trustees.
  Simply put, a financial adviser should not be paid more for 
recommending one product over another, but should abide by a fiduciary 
standard of care. Would you be comfortable if your doctor was paid more 
for an office visit for recommending one drug over another or for a 
lawyer to be paid more for interpreting the law one way or the other? 
No, of course not. Yet, we allow these same conflicts to exist with 
those that are providing millions of hardworking Americans with advice 
on their retirement savings.
  These conflicts encourage investors to, for example, push a 70-year-
old retiree to invest more of her savings in a stock fund rather than a 
less risky short-term bond fund simply because the adviser receives 150 
percent more for making the riskier recommendation.
  Such a commonsense update in the law to address these conflicts is 
long overdue and, indeed, at the Department, is over 5 years in the 
making. During that time, the Department has published an initial 2010 
proposal, solicited feedback, held public hearings on that proposal, 
and issued even a reproposal this past spring.
  Since that reproposal was published, the public and interested 
stakeholders have had 164 days of public comment, 4 full days of multi-
panel public hearings, and ample opportunity to meet with the 
Department, which held over 100 meetings with interested stakeholders, 
not including meetings with Members of Congress.
  Thanks to the Department's diligence and willingness to listen to 
stakeholder concerns, the proposal now enjoys broad support, including 
support from 95 financial services groups, public interest, civil 
rights, and consumer organizations, labor unions, and many investment 
advisers who are already providing advice to savers under a fiduciary 
standard. These groups range from the AARP, Public Citizen, the 
Consumer Federation of America, to the Financial Planning Coalition, 
among many others.
  All this points to the Department's tangible efforts to take a 
balanced, measured approach to developing a rule that works. I fully 
support their efforts to continue to work towards its completion not 
only because it is necessary, but because it just makes common sense.
  What is more, the need to update the law quickly is urgent. 
Hardworking Americans lose an estimated $17 billion per year--or $47 
million per day--to conflicted retirement investment advice.
  While we should clearly encourage the Securities and Exchange 
Commission to also update its own rules on investment advice over 
securities, we should not make retirement savers wait any longer for 
protection by hinging the DOL's rulemaking to the SEC's, as H.R. 1090 
would do.
  Mr. Speaker, I support the Labor Department's efforts to finalize a 
rule and urge my colleagues to vote ``no'' on H.R. 1090.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
New Jersey (Mr. Garrett), the distinguished chairman of our Capital 
Markets and Government Sponsored Enterprises Subcommittee.
  Mr. GARRETT. Mr. Speaker, I thank the chairman.
  I thank Mrs. Wagner as well.
  As you know, Mr. Speaker, the Department of Labor's fiduciary rule is 
built upon faulty assumptions, faulty analysis, and faulty 
understanding basically of how the retirement system actually works in 
this country. It is really consistent with other policies of this 
administration.
  This rule will have a disparate impact and a negative impact upon 
middle class Americans and minorities in

[[Page H7233]]

this country, many of whom will find it difficult, if not impossible, 
to receive guidance from a financial professional for their retirement.
  This is not me saying this. The Department of Labor's own analysis 
shows that investors who do not work with a professional will risk 
making mistakes that cost them up to $100 billion.
  So today, Mr. Speaker, Congress has an opportunity to stand up on 
behalf of struggling American families and support this legislation.
  We have proof to show that this legislation really is necessary 
because we had folks coming to Washington to testify about it who 
supported the DOL rule. They said do not worry. They said that, if the 
traditional brokerage firms can't live with a simple fiduciary standard 
and refuse to serve modest savers, so be it. Other financial 
professionals such as them on and off the Web who embrace the client-
first approach stand ready to help Americans prepare for a secure 
retirement. Well, that was Rebalance IRA.
  Someone went to that company, a modest American, and said, ``Will you 
service us?'' This was their response: ``If you have scheduled a call 
with us, I want you to be aware that, as much as we would enjoy 
discussing your retirement goals, until you have at least $100,000 in a 
retirement account, our service at this time is not really the best 
solution for you. Our fees will absorb too much of your investment 
return, which runs counter to our mandate to help you to retire.''
  So, Mr. Speaker, the very same people who say the system will work 
under the DOL guidelines prove that, when people of modest means--
Americans who are simply trying to scrape by each week and each month 
and put a little bit away--will not have that investment advice which 
their very own Department of Labor says is necessary to get by and to 
fulfill the American Dream.
  The Retail Investor Protection Act will restore regulation to the 
market to where it belongs: with the SEC. It will prevent the 
Department of Labor from worsening the retirement savings crisis that 
our country is facing. I say support the American Dream. Support this 
legislation.
  Ms. MAXINE WATERS of California. I yield 3 minutes to the gentlewoman 
from Wisconsin (Ms. Moore), the ranking member of the Monetary Policy 
and Trade Subcommittee on the Financial Services Committee.
  Ms. MOORE. I thank you so much, Madam Ranking Member.
  Mr. Speaker, I rise in opposition to H.R. 1090. I must say to 
Representative Wagner she is correct when she says that there were 30 
Democrats--I am one of them--who supported similar legislation, but 
that was before the Department of Labor reproposed the conflict of 
interest rules, gave us sort of an unprecedented 164-day comment period 
during the reproposal, and they withdrew the original 2010 proposal and 
put forward the reproposed rule in 2015, 5 years. As we discussed it, 
they have committed to making considerable improvements.
  Now, the SEC has yet to begin the process of a related rulemaking 5 
years after the Department of Labor began the process, and they have 
made it really clear that they don't think they will get to it.
  I do want to point out--since I have 3 whole minutes here--that it 
has been very difficult to get the majority party to agree to providing 
the SEC with the needed resources that would, in fact, enable them to 
undertake the work that the Department of Labor has already put forward 
on this. So I don't think we should wait until after the SEC acts to 
issue a rule. And this legislation before us would only delay these 
important consumer protections.
  The Department of Labor has received a lot of feedback, especially 
from me. Mr. Speaker, I have been extremely vocal in highlighting 
areas, some of them which you have heard on the other side mentioned 
here today--very vocal on the reproposed rule where I think it needs to 
be improved and, in fact, led a letter to the Department of Labor with 
96 Democratic colleagues signing on to that letter.

                              {time}  1645

  However, I do think that the time is now for Congress to partner with 
the DOL, with industry, and with retirement savers toward the best 
possible final rule to encourage and protect retirement savings.
  Now, I want to mention that the overwhelming majority of advisers are 
good people with their clients' best interest at heart. In fact, no one 
in this debate is suggesting that we don't support policy which puts 
the best interest of the client first and foremost. But when financial 
advisers are unscrupulous, they have a devastating impact on retirement 
savers.
  Further, when advisers are responding to skewed incentives that 
encourage conflicts and put clients in products, that may be okay for 
the client, but placement in these products are driven primarily by the 
adviser's bonus.
  The SPEAKER pro tempore. The time of the gentlewoman has expired.
  Ms. MAXINE WATERS of California. I yield the gentlewoman an 
additional 30 seconds.
  Ms. MOORE. The DOL rule that is being reproposed seeks to mitigate 
these conflicts of interest so that the best advisers in companies get 
clients and compensation based on the best interest and the outcomes 
for their clients.
  I think that this is a backdoor approach to kill the rule, any rule, 
and it will leave gaping loopholes in Federal laws.
  My advice to my colleagues is that we defeat this bill.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Wisconsin (Mr. Duffy), chairman of the Oversight and Investigations 
Subcommittee of the Financial Services Committee.
  Mr. DUFFY. Mr. Speaker, we, before this debate, were having a debate 
on the Ex-Im Bank, and I made a point about my friends across the aisle 
standing up for big businesses, the cronyism between big government and 
Big Business. In this debate, they have a chance now to stand with 
small investors, the men and women around this country who put a little 
bit away every paycheck to hopefully have a little nest egg for their 
retirement, to stand with those people to make sure that when they get 
to their retirement, they have a nest egg that is worth something, and 
to make sure that those folks have advice along the way.
  The way the Department of Labor rule is structured is that most 
Americans aren't going to be able to get advice from a financial 
adviser; they are going to be driven to a robo-adviser. What that means 
is they are going to have to go to a Web site, answer about 6 to 10 
questions, and the Web site will pump out a generic investment 
suggestion for them. No personally tailored advice from a financial 
adviser.
  That also has another effect. Think last month or 2 months ago in 
August when we had market movement. A lot of people get freaked out and 
they sell. But if you have an adviser, they say: Hold on. No, no, no, 
we have a long-term plan here. Don't sell, don't sell. Hold on. We are 
going to weather this storm together.
  But is a robo-adviser, the text from the computer, going to calm your 
nerves so that you don't sell your portfolio? This doesn't work for the 
American people.
  What the Department of Labor is doing is saying: If you are wealthy, 
if you have a lot of money, if you have a big nest egg, then you can 
get advice. But if you are poor or middle class, a middle-income 
American, you are not entitled to the same advice of the wealthy and 
the powerful.
  I am mostly concerned about one other point here, is that if this 
rule goes into effect and less Americans save and have less return on 
their investment, when they get to their retirement years, they are 
going to be more reliant on the government. We want people less 
reliant. We want people to take more responsibility so they have a nest 
egg to fund their retirement years, pay for themselves. The way this is 
structured, you will have less people doing that and more people 
looking to the government for care. I guess that is a greater debate 
that we have in this institution: Do we want more people relying on the 
government?
  I think the only conclusion I can draw with your support for this 
rule is, absolutely, yes. That is a wrong approach. We come from a long 
line of people who believe in self-reliance, in

[[Page H7234]]

taking care of ourselves and our family. This rule from the Department 
of Labor is bad. Let's fix it with this bill.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 3 minutes to 
the gentlewoman from New York (Mrs. Carolyn B. Maloney), the ranking 
member of the Subcommittee on Capital Markets of the Financial Services 
Committee.
  Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, I thank the ranking 
member for yielding and for her leadership on this issue.
  Mr. Speaker, I include in the Record over 95 investor protection and 
consumer protection groups who adamantly support the position of the 
Department of Labor rule that protects investors and consumers.

                                          Save Our Retirement,

                                                 October 26, 2015.

   Oppose H.R. 1090, the Misnamed ``Retail Investor Protection Act''

       Dear Representative We are writing as organizations that 
     strongly support the Department of Labor's (DOL) efforts to 
     strengthen protections for working families and retirees by 
     requiring the financial professionals they turn to for 
     retirement investment advice to act in their best interests. 
     As such, we oppose H.R. 1090, the misnamed ``Retail Investor 
     Protection Act,'' and urge you to vote NO when the bill is 
     considered on the House floor.
       H.R. 1090 is a clear attempt to thwart DOL action by making 
     the Department wait for years and possibly indefinitely until 
     after the Securities and Exchange Commission (SEC) finalizes 
     a rule under securities laws--a process that the SEC has not 
     yet initiated. And, to further delay action, the bill imposes 
     on the SEC new requirements to engage in further economic 
     analysis, beyond the extensive analysis it has already 
     conducted, and make formal findings before promulgating a 
     rule. By impeding DOL's efforts, this bill would in no way 
     protect retail investors; instead, it would protect those 
     financial professionals who take advantage of loopholes in 
     the law to profit at their clients' expense.
       This approach would effectively cripple DOL's ability to 
     fulfill its unique and critical regulatory role under ERISA. 
     When Congress enacted ERISA, it intentionally set a higher 
     standard for protecting retirement assets than applies to 
     other investments. There are good reasons to do so. 
     Retirement assets are special, as evidenced by the fact that 
     they are heavily subsidized by the government through the tax 
     code. These tax subsidies should flow to individuals, not 
     financial firms, and should not be depleted by conflicts of 
     interest.
       Retirement savers who are struggling to fund an independent 
     and secure retirement need financial advice they can trust is 
     in their best interest. Today, neither our securities 
     regulations nor the rules under ERISA provide that assurance. 
     Instead, both sets of regulations expose retirement savers to 
     recommendations from conflicted advisers who are free to 
     recommend products based on their own financial interests 
     rather than those of their customers. The DOL proposal--which 
     combines a best interest standard with meaningful 
     restrictions on the practices that undermine that standard--
     offers significant progress toward addressing this problem. 
     There is no reason to force the DOL to wait for the SEC, 
     since only the DOL has the authority and expertise to close 
     the loopholes in the ERISA rules.
       DOL has succeeded in crafting a balanced rule that provides 
     much needed new protections for retirement savers while 
     providing the flexibility necessary to enable firms operating 
     under a variety of business models to comply. While 
     adjustments can and doubtless will be made to clarify and 
     streamline certain of the rule's operational requirements, 
     the rule's overall framework is sound. Contrary to the 
     misinformation that has swirled around the DOL proposal, it 
     actually will help, not hurt, small savers. They need the 
     protections of the best interest standard more than any other 
     workers and retirees, since they can least afford high fees 
     and poor returns on their savings. And if some advisers 
     really do pull back, there are plenty of advisers happy to 
     provide affordable, best interest advice to clients at all 
     income levels.
       We can only hope that the SEC eventually will follow DOL's 
     lead and craft a similarly strong and effective rule for non-
     retirement accounts. But in a nation that faces a retirement 
     crisis, and with DOL ready to act, we cannot afford to wait. 
     We therefore urge you to reject H.R. 1090--or any legislation 
     that would stall, derail or interfere with the DOL 
     rulemaking, which is proceeding under an appropriate 
     deliberative process--and instead support DOL's efforts to 
     finalize a rule based on the sound regulatory approach it has 
     proposed.
           Sincerely,
       AARP, American Federation of State, County and Municipal 
     Employees (AFSCME), Alliance for a Just Society, Alliance for 
     Retired Americans, American Association for Justice, American 
     Association of University Women, Americans for Financial 
     Reform, Association of University Centers on Disabilities, 
     Better Markets, Center for Community Change Action, Center 
     for Global Policy Solutions, Center for Responsible Lending.
       The Committee for the Fiduciary Standard, Consumer Action, 
     Consumer Federation of America, Consumers Union, Fund 
     Democracy, International Association of Machinists and 
     Aerospace Workers, International Brotherhood of Boilermakers, 
     International Brotherhood of Electrical Workers Union, 
     Leadership Conference on Civil and Human Rights, Lynn Turner, 
     former chief accountant, SEC, Main Street Alliance.
       Metal Trades Department, AFL-CIO, National Active and 
     Retired Federal Employees Association (NARFE), National 
     Council of LaRaza, National LGBTQ Task Force Action Fund, 
     National Organization for Women, Pension Rights Center, 
     Public Citizen, Public Investors Arbitration Bar Association, 
     Service Employees International Union (SEIU), United Auto 
     Workers, United Steelworkers, Paper and Forestry, Rubber, 
     Manufacturing, Energy, Allied Industrial and Service Workers 
     International Union (USW), U.S. PIRG, Wider Opportunities for 
     Women.

  Mrs. CAROLYN B. MALONEY of New York. Mr. Speaker, the Department of 
Labor's fiduciary duty rule advances a very simple principle: If you 
are giving advice to retirement savers and you are being compensated 
for your advice, then you have to put your customers' interests first.
  It is worth noting that most investors already think that this is the 
law, even though it isn't.
  So the Department of Labor's rule is a much-needed update of the 
rules governing investment advice to retirement savers. I would say we 
have a particular responsibility as legislators to protect retirement 
savers, which is what the DOL rule does.
  While the proposed rule is not perfect, no rule ever is. The 
Department has been incredibly responsive, very responsive to 
legitimate concerns that have been raised. They have been more than 
willing to engage with Congress and with industry and with investors to 
come up with better solutions.
  But this bill before us would effectively stop the Department of 
Labor's rule in its tracks, which is the completely wrong thing to do 
if you want to protect investors.
  This bill is also redundant, unnecessary, and really reflects a 
misunderstanding of the law.
  One of the core principles of the Employee Retirement Income Security 
Act, or ERISA, was that investments made for the purpose of retirement 
security should enjoy special protections under the law. That is what 
this DOL rule does. This, by definition, means that the protections 
under ERISA are supposed to be different than the protections under 
ordinary securities laws. They should be more protective of the 
retirement investor.
  As a result, the SEC and the Department of Labor have different 
responsibilities. When two agencies have different responsibilities, it 
is completely appropriate for them to move separately and even to write 
different rules.
  This bill would also require the SEC to conduct yet another study--or 
I would call it a delay--on a uniform fiduciary standard for broker-
dealers. We already required the SEC to conduct a study on this issue 
in Dodd-Frank, and the SEC staff's recommendation in that study was 
that the SEC should, in fact, adopt a uniform fiduciary standard for 
broker-dealers.
  Requiring the SEC to conduct largely the same study that they already 
conducted in 2011--I believe they can move ahead with their own 
fiduciary rule--is pointless and shows that the true intent of the 
bill, the underlying bill, is to delay both the Department of Labor's 
rule and any future SEC rule which ultimately is there to protect the 
retirement saver and investor.
  I urge my colleagues to oppose this bill, and I urge them to vote for 
investor protections and to protect consumers. I urge a very strong 
``no'' vote.
  Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from 
California (Mr. Royce), chairman of the House Foreign Affairs 
Committee.
  Mr. ROYCE. Mr. Speaker, I rise today in support of the Retail 
Investor Protection Act.
  The Department of Labor's proposal here is going to harm the very 
working class Americans that the administration claims that it is 
supporting.
  This is not hyperbole, this is not a hypothetical. I want to give you 
the real results of what happened in the United Kingdom when it enacted 
similar regulation in 2013. Here are the disastrous results: 310,000 
clients were dropped; 60,000 new investors were rejected; an estimated 
11 million potential savers were priced out of advice.
  In the face of these facts, the Department of Labor continues to 
insist on

[[Page H7235]]

applying the failed philosophy of ``government knows best'' to 
retirement savings.
  Mr. Speaker, I thank the gentlewoman from Missouri for her leadership 
on this, and I urge my colleagues to support this legislation.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 5 minutes to 
the gentleman from Virginia (Mr. Scott), the ranking member of the 
Education and the Workforce Committee.
  Mr. SCOTT of Virginia. Mr. Speaker, I rise in opposition to H.R. 
1090, the so-called Retail Investor Protection Act.
  This bill puts an effective end to the Department of Labor's 
responsible effort to modernize a fiduciary standard under the Employee 
Retirement Income Security Act, or ERISA, that was implemented 40 years 
ago.
  As we all know, our country's retirement savings landscape has 
changed significantly since that time. Forty years ago, the majority of 
retirement assets were held in defined benefit plans and managed by 
professionals. Forty years ago, employer-based 401(k) plans did not 
exist and IRAs had just been established.
  Today, Americans have more than $12 trillion invested in 401(k) plans 
and IRAs, and they have to make their own financial decisions. Many 
workers and their families don't have the expertise in managing 
investment portfolios and so they often have to rely on financial 
advisers to help them save for retirement.
  While many of those advisers do right by their clients, others do 
not. There is a lot of different financial products that Americans can 
purchase. Some have extremely high fees, while comparable products--and 
perhaps even better ones--have lower fees. This current standard allows 
for unscrupulous advisers to give conflicted advice and push a 
financial product from which they will reap a bigger profit even if the 
product is not in the best interest of their client.
  It is individuals with modest retirement savings--many of our 
constituents--who stand to lose the most from receiving conflicted 
advice. National Public Radio recently conducted a series that in part 
highlighted how Americans are losing billions of dollars every year out 
of their retirement accounts because they are paying excessive fees.
  As a hypothetical example, NPR cited a person who invests $10,000 and 
that investment makes a 7 percent return every year. Over 40 years, 
that investment would be worth almost $150,000. But if you have 
invested in a fund that charges a 2-percent annual fee, now you have 
cut the return down from 7 percent down to 5 percent. Over 40 years, 
your investment would be worth about $70,000, not almost $150,000. That 
is, obviously, a big difference, and that is the kind of insidious 
erosion of retirement savings that the Department is working to end 
with their rule.

  Since April, the Department of Labor has been engaged in this 
necessary rulemaking process. The Department has informed us that over 
that time, it provided the American public a total of 164 days to 
submit comments; they conducted 4 full days of public hearings; and 
convened over 100 meetings. That total doesn't account for meetings 
they have held with Members of Congress.
  Now the Department is completing its work on the rule and is taking 
into account the thousands of comments it received. Here in Congress, 
we should just let them finish their job.
  Millions of Americans rely on financial advisers for advice on how to 
protect their hard-earned retirement savings, and it is about time that 
we ensure that those Americans are provided advice consistent with 
their best interest, not with what would ultimately be in the best 
interest and profit for the adviser.
  I, therefore, urge my colleagues to defeat this legislation.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Illinois (Mr. Hultgren), a very important member of the House Financial 
Services Committee.
  Mr. HULTGREN. Mr. Speaker, I thank the chairman.
  Today, I rise in support of legislation that will protect hard-
working Americans' access to retirement advice.
  The Labor Department is aggressively pushing a flawed rule which 
might be a political win for the Obama administration but would come at 
the expense of Americans trying to save for retirement. This is why I 
cosponsored the Retail Investor Protection Act.
  The administration claims the plan that they have put forward will 
help people trying to save for retirement. Instead, it would hurt many 
of them.
  The Labor Department has proposed restricting retirement advice and 
reducing options for what financial instruments can be used to save for 
the future.
  Most concerning, the regulatory costs would hit those who have had 
difficulty saving the hardest. One firm in my district with dozens of 
offices that serve more than 30,000 customers told me that they fear 
the Labor Department proposal will make it impossible to offer quality 
services to low- and middle-income customers.

                              {time}  1700

  Clearly, the administration has no concept of what these rules will 
mean for Main Street investors, and they have chosen to ignore the 
benefits provided by retirement advisers. My constituents tell me they 
save more because of the advice they get. Relatively simple advice, 
such as not making irrational decisions in volatile markets, is 
incredibly valuable, especially for less sophisticated investors. 
Furthermore, the Department's proposal mentions annuities 172 times, 
but the Regulatory Impact Analysis does not examine the impact on these 
financial products.
  The Department of Labor is choosing to ignore Congress and the people 
it claims to protect. On July 29, I sent two separate letters to 
Secretary Perez. It has now been almost 3 months, and he has done 
nothing to address the concerns of my constituents.
  There are now at least 51 of my colleagues, both Republicans and 
Democrats, who share my concerns that listed options would no longer be 
permissible in retirement accounts. The Labor Department claims that 
they are working closely with the SEC, but during a hearing last 
Friday, a key witness from the SEC could not provide me with one 
example of when the Labor Department had included any SEC input.
  It is time for the administration to stop restricting where and how 
Americans choose to pursue financial stability and security. Vote 
``yes.''
  Ms. MAXINE WATERS of California. I yield 3 minutes to the gentleman 
from Texas (Mr. Al Green), the ranking member of the Subcommittee on 
Oversight and Investigations on the Financial Services Committee.
  Mr. AL GREEN of Texas. I thank the ranking member for her outstanding 
work and efforts in this area. The gentlewoman has truly been a 
champion for people--the very little people who some people have styled 
we are talking about today.
  Mr. Speaker, the best way, without question, to get the SEC to act 
would be to allow the DOL to act. If the DOL is allowed to promulgate 
its rules, I guarantee you the SEC will move with an additional amount 
of deliberate speed.
  Currently, the DOL is simply attempting to cause people who act as 
financial advisers to have fidelity to their clients above their own 
personal interests. What is so unusual about the concept is the person 
who is working for you having fidelity that benefits you as opposed to 
the person who is working for you.
  Right now, as the laws exist, a person acting as a financial adviser 
can become a financial predatory adviser. Not all are. I am not 
accusing the industry of anything. I am just making a point about what 
can happen. When this happens, the person who is to give you advice--
for a fee, I might add--can sell you a product for a higher fee and 
that has a higher risk as opposed to a similar product with a lower fee 
and that carries a lower risk. The higher fee is the temptation that 
will cause predatory financial advisers to manifest themselves and take 
actions against the best interests of the clients, who are paying them 
to represent them and benefit them.
  We ought not allow this kind of action to be sanctioned by the 
Congress of the United States of America. What the President is 
attempting to do by and through the DOL is to simply say: If you are 
going to represent your client, you are going to put your interest 
beneath the client's interest. You will

[[Page H7236]]

subordinate your interest to your client's interest. You will not allow 
yourself to yield to the temptation to take a higher amount of money 
for yourself and put your client at a greater amount of risk.
  That is all this rule is about.
  Let's allow the rule to come into existence. If we want to debate it 
thereafter and amend it, we can. But let's not prevent it from ever 
manifesting itself by causing some to believe that the SEC will do what 
the DOL will not, because the evidence is not there to support the 
notion that we are going to get faster results from the SEC.
  Finally, this: in a righteous world, we would be calling some of this 
activity fraud.
  Mr. HENSARLING. Mr. Speaker, I yield 2\1/2\ minutes to the gentleman 
from Kentucky (Mr. Barr), another valued member of the Financial 
Services Committee.
  Mr. BARR. Mr. Speaker, I rise today in support of the Retail Investor 
Protection Act, legislation that will ensure investor access to 
personalized and cost-effective investment advice.
  The Department of Labor's proposed fiduciary rule will make it more 
difficult for hard-working Americans to access financial advice and to 
save for retirement.
  Time and again, I have heard from constituents throughout my central 
Kentucky district of how this massive, 1,000-page rule will negatively 
affect them: Private employers and not-for-profit organizations will no 
longer be able to bring in financial advisers to provide educational 
information about retirement plans to their employees. Investors with 
small accounts will no longer be able to receive advice for their 
401(k) plans. Middle class investors will lose access to professional 
advice, and financial products like annuities will no longer be 
available. More and more Americans will be forced to seek information 
on the Internet or from robo-advisers.
  Let's get this straight, Mr. Speaker. This rule will replace flesh 
and blood professional advisers with a computer. As one of my 
constituents said to me, if you think professional advice is expensive, 
wait until you see the cost of amateur advice. In short, the Department 
of Labor's rule will hurt the very people it is supposed to protect.
  On July 29, Representatives Wagner, Scott, Clay, and I sent a 
bipartisan letter, signed by 21 Members, to Secretary Perez, asking for 
the DOL to stop these disruptive changes and repropose the rule in 
light of the many negative comments. Secretary Perez replied that the 
DOL would not entertain the request. That is why it is necessary for 
Congress to take action and pass this legislation.
  Look, we all agree that financial advisers should act in the best 
interests of their clients, but heightened consumer protections in the 
investment space should apply broadly and should not create two classes 
of investors. It should not bifurcate the industry to those who can 
afford advisers and those who cannot. The result will be less choice 
for consumers and a lack of access for retail investors to sound 
financial advice. The best consumer protection is not central planning 
from Washington. It is choice and competition.
  I thank Representative Wagner for her leadership on this issue, and I 
encourage my colleagues to vote for competition and choice, to vote for 
access to professional financial advice, and to defeat this rule.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 2 minutes to 
the gentleman from Maryland (Mr. Cummings), the ranking member of the 
Committee on Oversight and Government Reform.
  Mr. CUMMINGS. I thank Ranking Member Waters for yielding, and I thank 
her for her excellent and compassionate leadership not only on this 
issue but on so many others.
  I rise today to oppose H.R. 1090, the so-called Retail Investor 
Protection Act, which is anything but a protection for investors.
  Rather than protecting our constituents' investments, this Act would 
prevent the Department of Labor from finalizing a rule to establish a 
fiduciary standard for investment advisers until the Securities and 
Exchange Commission finalizes a rule first.
  In essence, the bill before us would prevent the Labor Department 
from finalizing any rule at all. The administration has already 
indicated it would veto this measure if it is passed by Congress.
  This past March, Senator Elizabeth Warren and I held a forum as part 
of our Middle Class Prosperity Project to consider the need for a 
strong fiduciary standard to protect Americans who are saving for 
retirement. We heard directly from Americans who had lost tens of 
thousands of dollars because they did not receive advice that was in 
their best interests.
  In some cases, people may not even realize they have placed their 
trust in advisers who are not fiduciaries and who have no obligation to 
act in their best interests. One study found that Americans who are 
saving for retirement lose more than $43 billion, on average, each year 
because advisers don't act in their clients' best interests.
  The real solution, as we learned in our forum, is to have a strong 
conflict of interest rule to ensure the advice Americans receive--
advice they receive as paying customers--directs their hard-earned 
retirement savings to investments that will work in their best 
interests.
  This House should not put roadblocks in the way of this commonsense 
reform, which would protect our constituents' money. I urge all of the 
Members of the House to oppose H.R. 1090.
  Mr. HENSARLING. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman 
from Indiana (Mr. Messer), another valued member of the committee.
  Mr. MESSER. I thank the chairman.
  I thank Mrs. Wagner for her leadership on this important issue.
  Mr. Speaker, I rise today in support of the Retail Investor 
Protection Act.
  Let me be clear. We all agree that investment advisers should act in 
the best interests of their clients, and we all want to ensure that 
low- and middle-income investors get good financial advice. But in life 
and in the world of public debate, we are not just responsible for our 
intentions; we are also responsible for our results.
  That is the problem with the Department of Labor's fiduciary rule. 
Whatever their intentions, the results of this administration's policy 
will hurt the very people they are saying they are trying to help. Here 
is why: The rule will increase the cost of financial advice and force 
working class investors to pay higher fees. The fact is that most 
investors can't afford these fees. As a result, millions of investors 
will get no advice at all. That is not good for anybody.
  The bill today will delay the implementation of the new so-called 
``fiduciary rule'' and ensure that investors continue to have access to 
sound financial advice.
  I urge my colleagues to protect lower and middle class investors and 
stop this administration's so-called ``fiduciary rule.''
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 2 minutes to 
the gentleman from Maryland (Mr. Sarbanes).
  Mr. SARBANES. I thank the gentlewoman for yielding.
  Mr. Speaker, the name of this bill is the Retail Investor Protection 
Act. If you didn't know better, you would think it was a bill designed 
to protect the retail investor. But, in fact, it does the opposite of 
that because it blocks the Department of Labor from putting in place 
commonsense rules that would make sure that retirement investment 
advisers handle their clients with care and with a fiduciary duty.
  The Department of Labor wants to update rules that are now 40 years 
old, and that, again, makes common sense. Here is what happens: A 
retiree wants to take his 401(k) plan and make a decision about where 
to invest it. The retirement adviser comes along and offers up that 
advice. Meanwhile, the retiree does not realize that that person may be 
getting a commission from the very funds to which that retiree is being 
directed.
  That is a conflict of interest, pure and simple.
  If you asked the average retiree, ``Do you think we need a rule that 
would protect retirees and other investors from this kind of conflict 
of interest, that would put some kind of fiduciary duty in place so the 
retirement investor is acting in the interest of the client,'' if you 
said, ``Do you think we need a rule,'' the average retiree would ask, 
``Do you mean we don't already have that rule in place?'' He wouldn't

[[Page H7237]]

believe it. He wouldn't believe this conflict of interest is 
structurally built into the system and is resulting in billions of 
dollars being taken from workers' retirement savings every single year.
  So why is the Congress taking this up? Why are we trying to block the 
DOL?
  I fear that what is happening is Congress is getting pushed around 
again by Wall Street and by wealthy special interests. We heard a lot 
about crony capitalism when talking about the last bill. That is what 
is going on here. There is a letter in the Record from the Koch 
Brothers and their gang, Americans for Prosperity and FreedomWorks. 
They are in here trying to block the Department of Labor's bill.
  So Big Money is cascading into Washington. It is affecting the way we 
make policy. It is going to keep coming. The fix is in. I hope my 
colleagues will come to the floor today and vote against this, but I am 
not optimistic.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
New Hampshire (Mr. Guinta), another great member of the House Financial 
Services Committee.
  Mr. GUINTA. I thank Chairman Hensarling.
  Mr. Speaker, I stand today in strong support of H.R. 1090, the Retail 
Investor Protection Act.
  This isn't about the Koch Brothers. This is about low- and middle-
income families, seniors, people who try to take a little bit of their 
life savings and put it away over time. You heard speakers earlier 
talking about 98 percent of the people who have IRAs have under $25,000 
in them. They are who we are aiming to protect. They are the people who 
are coming to us, asking--begging--for assistance, and they are who we 
stand with because this is America.

                              {time}  1715

  This is not a place where Washington, D.C., is supposed to stand firm 
and dictate policy for everyone. We are supposed to be about limited 
government. We are supposed to be in this Nation about putting our 
trust and our faith in individuals.
  This proposed legislation by the DOL does the exact opposite. It 
takes power away from the individual. It takes power away from the 
individual to talk to their financial adviser and gain educational 
opportunities to make informed decisions about their long-term 
investments.
  My wife and I have two kids, 10 and 12. We are thinking about their 
financial stability. We want to encourage them to have long-term 
investments, like my folks suggested to me, so they can make informed 
decisions. But, no, Washington is going to decide that they can't, that 
I can't, that my folks can't, that the people I represent can't, all in 
the name of ensuring that Washington knows better.
  Well, Mr. Speaker, I put my faith in the people. I do not put my 
faith in bureaucrats who think they know better.
  I think that Representative Wagner's leadership is tremendous on this 
particular issue because she feels just as passionately as the rest of 
us. We are not only talking about the lack of ability, but the 
compliance cost, which is going to get pushed onto that same 
individual.
  So I encourage my colleagues, I implore my colleagues, to vote for 
this bill and support H.R. 1090.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield 2 minutes to 
the gentlewoman from Oregon (Ms. Bonamici).
  Ms. BONAMICI. Mr. Speaker, I rise in opposition to H.R. 1090, the 
misnamed Retail Investor Protection Act, which essentially ends the 
progress made by the Department of Labor on releasing an updated 
conflict-of-interest rule that seeks to protect our constituents' hard-
earned savings and strengthen the ability for those in the middle class 
to save for retirement.
  In June, I had the opportunity to speak with Secretary Perez in a 
hearing held by the Education and the Workforce Committee on the 
Department's work to draft a comprehensive rule and, importantly, a 
rule that is developed by working with diverse stakeholders and based 
on feedback from senior advocacy groups, civil rights groups, and the 
industry that provides these services.
  This is the process that is currently underway. H.R. 1090 would stop 
this process. Secretary Perez is on record saying he is listening to 
feedback and incorporating changes. Let's allow the process to go 
forward, not stop it.
  I have met with families and individuals across Oregon who are 
struggling to get ahead, and I know the sacrifice that is involved in 
each and every dollar they set aside to contribute to their future 
retirement. I am disappointed by the efforts today to stop this rule.
  We need a level playing field to allow our constituents to take 
advantage of the many opportunities that exist to grow and protect 
their investment.
  Finally, as a former consumer protection attorney, I learned and know 
that strong rules can empower consumers and bring transparency to the 
marketplace. This is what the Department of Labor is working toward, 
and I am disappointed in this bill's attempt to stop their important 
work to finish this rule.
  I urge my colleagues to join me in opposition to H.R. 1090.
  Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from 
Texas (Mr. Williams), another outstanding member of the House Financial 
Services Committee.
  Mr. WILLIAMS. Mr. Speaker, President Obama would have us believe that 
the American people are incapable of making our own choices, that we 
are just not smart enough. From health care to education, to now 
personal retirement accounts, the Obama administration thinks 
government knows best.
  Remember when Obamacare architect Jonathan Gruber claimed ``the 
stupidity of the American voter''? A recent administration ruling by 
the Department of Labor demonstrated this arrogance again when it said 
Americans ``seldom have the training or specialized expertise necessary 
to prudently manage retirement assets on their own.'' This is 
unbelievable because the government can't even manage the taxpayers' 
dollars.
  So their solution to our apparent stupidity is an $80 billion ruling 
that will increase costs for low- to middle-income investors and limit 
access to quality investment advice. Some solution this is.
  Mr. Speaker, there are already measures in place to provide 
incentives for advisers to act in their client's best interest, 
measures that are far less costly and far less restrictive.
  To Jonathan Gruber, President Obama, and members of this 
administration who think they know better than the average American, 
let this bipartisan opposition illustrate how wrong they are.
  Mr. Speaker, I urge passage of the Retail Investor Protection Act. In 
God we trust.
  Ms. MAXINE WATERS of California. I yield 1 minute to the gentlewoman 
from Texas (Ms. Jackson Lee).
  Ms. JACKSON LEE. Mr. Speaker, there are comments on this floor that 
said we had to listen to those who came. I want to stand and listen to 
the hardworking Americans who ultimately will retire.
  I am tired of blocking good measures that protect them, such as the 
Labor Department's efforts to strengthen protections for working 
families and retirees by requiring their financial professionals who 
provide retirement investment advice be treated as fiduciaries under 
ERISA laws.
  It is important to note that this is a simple requirement. It does 
not undermine the responsibilities or the profits of broker-dealers and 
others. It just simply says that they must be held to a standard to 
protect those retirees who have worked so very hard.
  I oppose the underlying bill, H.R. 1090.
  I am also glad to stand on the floor and support, however, H.R. 597, 
the Export-Import Bank Reform Reauthorization Act, finally to open the 
Bank and create jobs and opportunities for so many.
  Again, let me say that I am standing with those workers who are not 
here, retirees who have worked, hardworking Americans who will have 
their investments protected, by making sure that those who give them 
advice are regulated and held to very high standards.
  Mr. Speaker, I rise in opposition to H.R. 1090, the Retail Investor 
Protection Act.
  I oppose this bill, because it would undermine efforts to curb 
conflicts of interest in the marketing and development of retirement 
investments, particularly for retail investors.

[[Page H7238]]

  I support the efforts of individuals and businesses to succeed in the 
American economy.
  Unfortunately for too long the success of some is coming at the total 
disregard for the rights of workers and their families.
  Investments in a home, savings placed in retirement accounts or into 
401ks are ways for working people to ensure that they will not live in 
poverty when they retire.
  This bill would prevent the Department of Labor from addressing 
disparities in how the rights of investors are protected.
  Broker-dealers trade securities for themselves or on behalf of their 
customers, and they typically charge a commission fee for each 
transaction and may also be compensated with a commission from the 
company whose securities they trade.
  In making recommendations to clients and conducting transactions, 
they must adhere to ``suitability'' standards that ensure that their 
recommendations are suitable to the client's financial situation and 
objectives.
  Investment advisers, meanwhile, who manage the employee retirement 
and benefit plans for private companies, must under the Employee 
Retirement Income Security Act (ERISA; PL 93-406) adhere to higher 
``fiduciary'' standards and take actions that are in the best interests 
of the participants.
  Among other things, such investment advisers must act solely for the 
interests of participants and beneficiaries and for the exclusive 
purpose of providing benefits and paying plan expenses.
  They also must act prudently and avoid conflicts of interest. 
Investment advisers are paid through an annual flat fee for managing 
the investments, which is based on the size of the plan.
  Broker-dealers are regulated by the Securities and Exchange 
Commission (SEC) and the Financial Industry Regulatory Authority 
(FINRA) under the suitability standard, while investment advisers are 
regulated more directly by the SEC under the higher fiduciary standard.
  While employee retirement benefit plans are managed by investment 
advisers, individuals also invest on their own for retirement and other 
purposes and often use either investment advisers or broker-dealers to 
help them decide on investments and to perform the trades in stock or 
investment instruments.
  The 2010 Dodd-Frank Act required the SEC in Section 913 of the act to 
report on the standards of care applicable to broker-dealers and 
investment advisers, and it authorized the SEC to issue rules to extend 
the fiduciary standard now applicable to investment advisers to broker-
dealers when providing any advice about securities to retail customers.
  According to the Financial Services Committee, in 2011 the SEC 
released a staff study recommending that both broker-dealers and 
investment advisers be held to a fiduciary standard ``no less stringent 
than currently applied to investment advisers.''
  This past April, the Labor Department, acting under ERISA, proposed 
new rules regarding who is covered by ERISA's fiduciary standard and 
how that standard would be applied, saying that more needed to be done 
to protect individuals who are trying to invest and save for 
retirement.
  The proposed rule would treat all financial advisers who provide 
retirement investment recommendations and make trades on behalf of 
clients--including broker-dealers dealing with individual IRAs, 
401(k)'plan and other retirement investments--as fiduciaries under 
ERISA.
  Under the proposal, financial advisers would be required to provide 
investment advice that is in the best interest of the retirement 
investor ``without regard to the financial or other interests'' of the 
financial institution, adviser or other party.
  The SEC Rule allows retirement advisers to be paid in various ways as 
long as they are willing to put the interests of their customers first, 
in certain cases allowing advisers to receive common types of fees that 
fiduciaries otherwise can't receive under the law, such as commissions 
and revenue sharing.
  The Labor Department is currently reviewing public comments received 
on its proposed rule and has not indicated when the final rule will be 
issued.
  Supporters of the bill argue that it is needed to prevent a 
potentially harmful rule from going into effect.
  The proposed Labor Department rule would be very costly to broker-
dealers, requiring them to meet two separate standards when advising 
clients: the fiduciary standard when advising on retirement issues and 
the suitability standard for other investment matters.
  The resulting high compliance and potential liability costs, they 
say, could drive many smaller broker-dealers out of the market for 
providing retirement advice or lead them to service only larger dollar 
accounts, thereby limiting access to professional retirement planning 
and guidance for those retail investors who need it most and likely 
resulting in a reduction in the overall level of retirement savings for 
American workers.
  They note that the United Kingdom in 2013 implemented a similar rule, 
which has created an ``advice gap'' for 60,000 investors with smaller 
accounts.
  The Dodd-Frank law, they say, gave the SEC the lead role in setting 
the fiduciary standards, and they argue that the SEC, not the Labor 
Department, is the better choice for developing those rules because it 
is much more familiar with investment markets.
  In fact, they contend that the proposed Labor rule is confusing and 
actually conflicts with existing rules and securities market trading 
practices, and that it could disrupt the carefully considered 
regulatory regime applicable to broker-dealers and investment advisers 
that is administered by the SEC and FINRA.
  Broker-dealers and others operating under the lower ``suitability'' 
standard often have a direct conflict of interest, directing their 
customers to higher-cost investments that have hidden fees or from 
which the advisers get backdoor payments.
  We say this behavior in the predatory lending activity that led to 
the economic collapse in 2008.
  Home purchasers who could qualify for lower fixed rates for new home 
purchases were only shown loans that had high interest triggers that 
would double or triple mortgages a few years after they were purchased.
  The conflicts of interests in investment programs, the White House 
Council of Economic Advisers estimates, result in annual losses for 
affected U.S. investors of about 1 percentage point, or about $17 
billion per year in total.
  The Labor Department's proposed fiduciary rule would require all 
retirement investors to instead put their clients' best interests 
before their own profits.
  Blocking the Labor Department from issuing its rule until the SEC 
acts on a standard-of-conduct rule for broker-dealers could effectively 
kill the critical consumer protections that would be provided by the 
Labor rule, since the bill does not require the SEC to ever issue its 
rule.
  While the SEC should similarly update its rules governing investment 
advice related to securities, they argue that Congress should not hinge 
the Labor Department's efforts on the SEC's ability to do so.
  Labor's rule was thoughtfully developed and would not cause 
disruptions in the market, they say, noting that the department worked 
with the SEC in developing the rule and that it has taken into account 
the concerns of stakeholders.
  This bill prohibits the Labor Department from implementing a final 
rule on fiduciary standards for retirement investment advisers until 
after the Securities and Exchange Commission (SEC) conducts a study and 
issues a final rule setting standards of conduct for broker-dealers.
  Specifically, the Labor Department could not exercise its authority 
under ERISA to define the circumstances under which an individual is 
considered a fiduciary until 60 days after the SEC issues a final rule 
regarding standards of conduct for broker-dealers pursuant to Section 
913 of the Dodd-Frank Act.
  The bill would not, however, require the SEC to issue a rule.
  Prior to issuing a rule, the SEC must complete a study and report to 
Congress on whether retail investors are being harmed by the lower 
standard of care under which brokers and dealers operate, and offer 
alternate remedies to reduce confusion or harm to retail investors due 
to that different standard.
  It also must investigate whether the adoption of a uniform fiduciary 
standard would adversely affect the commissions of brokers and dealers, 
the availability of proprietary products and the ability of brokers and 
dealers to engage with customers, as well as whether a uniform 
fiduciary standard would adversely affect access by retail investors to 
investment advice.
  The conclusions in the report must be supported by economic analysis.
  In developing a rule, the SEC would be required to consider 
differences in the registration, supervision and examination 
requirements applicable to brokers, dealers and investment advisers and 
publish formal findings that the rule would reduce confusion or harm to 
retail customers caused by the different standards of conduct.
  I urge my colleagues to join me in opposition to this bill and 
protect the little that workers have from their shrinking wages to 
protect against falling into poverty once their work years have been 
spent in increasing the profits of employers.
  Mr. HENSARLING. Mr. Speaker, may I inquire how much time remains on 
each side.
  The SPEAKER pro tempore. The gentleman from Texas has 10 minutes 
remaining. The gentlewoman from California has 5 minutes remaining.
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Arkansas (Mr. Hill), one of the hardest

[[Page H7239]]

working members on the House Financial Services Committee.
  Mr. HILL. Mr. Speaker, in a chamber where we have no shortage of 
hyperbole and sanctimony, certainly this bill is no exception as I 
listen to the opposition.
  Today I rise in strong support of H.R. 1090, the Retail Investor 
Protection Act. I want to thank Representative Wagner for her 
leadership and the chairman for this time.
  We are down to the bottom of the barrel if we are quoting NPR as a 
source of economic research. There is no credible research that 
justifies what the Department of Labor is doing.
  Having worked in this industry for three decades, I can speak to this 
on a very personal basis.
  Instead of working in harmony and complying with Dodd-Frank, the DOL 
is preempting the SEC and the FINRA and moving ahead with its own 
agenda.
  As we have said today, there is broad consensus that financial 
advisers should act in the best interest of their customers, and they 
do. Any bad actors should be punished. There are existing rules and 
requirements for broker-dealers and investment managers to deal fairly 
and provide recommendations that are suitable for their customers and 
disclose conflicts of interest.
  We have left the appearance in this room hanging that prices are 
skewed. In fact, most retail investment products are sold by a 
prospectus with fixed prices that are fully disclosed to retail 
investors.
  We have heard today that this reproposal is an improvement over 
previous efforts by the Department of Labor. In fact, that is not true, 
Mr. Speaker. This pending rule is not an improvement.
  It turns its back on best practices of new account openings and 
includes a dispute resolution that turns its back on dispute resolution 
practices in the industry that will increase litigation and hurt retail 
investors and brokers alike.
  Representative Scott of Georgia calls this proposal a straightjacket 
for modest investors. I could not summarize it better.
  I urge my colleagues to join me in supporting H.R. 1090 and 
protecting sound retirement advice for retail investors.
  Ms. MAXINE WATERS of California. Mr. Speaker, I would like to inquire 
whether Mr. Hensarling has any more speakers.
  Mr. HENSARLING. Mr. Speaker, I have at least three more speakers.
  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. I yield 2 minutes to the gentleman from Minnesota 
(Mr. Emmer), who is last, but not least, on the House Financial 
Services Committee.
  Mr. EMMER of Minnesota. Mr. Speaker, since this Congress was sworn in 
last January, I have received more calls and emails and I have had more 
meetings with constituents and consumers of financial services about 
the Department of Labor's proposed fiduciary rule than perhaps any 
other issue that has faced us in Congress.
  Why? Because the Department of Labor's proposed fiduciary rule, if it 
is ever fully implemented, will actually harm the very people that it 
is purported to protect, middle- and low-income investors.
  Mr. Speaker, I came to Washington to fight against out-of-control, 
top-down government bureaucracies, and this DOL rule is their latest 
mad creation. We should look for ways to increase access to affordable, 
transparent, and high-growth financial products that meet the needs of 
all Americans, not limit them.
  According to a recent study by Oliver Wyman, an international 
management consulting firm, the proposed rule will increase costs for 
investors by an average of 73 percent. This increase will harm the 
ability of millions of Americans to get professional financial advice.
  This is particularly disturbing, considering research shows that 
assistance from a financial professional consistently leads to better 
retirement planning. For example, according to the same report: Advised 
individuals aged 35 to 54 years making less than $100,000 per year had 
51 percent more assets than similar nonadvised investors.
  Nearly 60,000 of my constituents make a living supporting the 
financial services industry. How does this rule help them or the people 
they assist? I recently heard from a financial adviser in my district, 
Ken, from Blaine, Minnesota, who told me that this DOL rule is a 
solution in search of a problem and that it will adversely affect his 
clients.
  Hardworking Minnesotans are gravely concerned that this rule will 
cause many financial advisers to severely limit the types of products 
that customers want, need, and desire or, even worse, it will force 
advisers out of the business.
  I thank our friend, Mrs. Wagner, for her leadership on this issue.
  I urge my colleagues on both sides of the aisle to protect middle- 
and low-income investors by supporting the Retail Investor Protection 
Act.
  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time.
  Mr. HENSARLING. Mr. Speaker, I yield 1 minute to the gentleman from 
Georgia (Mr. Allen).
  Mr. ALLEN. Mr. Speaker, it was mentioned earlier about a hearing that 
we sat through in the Committee on Education and the Workforce on this 
rule, which frankly I couldn't believe.
  The American people want choice, not another top-down government rule 
where you take away their choice. That is why I rise today in support 
of H.R. 1090, the Retail Investor Protection Act, to block the 
Department of Labor's misguided fiduciary rule.
  All across Georgia's 12th District people depend on their trusted 
financial advisers to help manage their hard-earned savings and plan 
for future retirement.
  As drafted, the Department of Labor's 1,000-page rule is simply 
unworkable. Unaltered, this burdensome regulation would harm the very 
people it is designed to protect the most by substantially limiting 
access and increasing costs of retirement planning.
  The Federal Government has no right to prevent low-and middle-income 
families and small businesses from accessing affordable financial 
planning advice.
  I urge my colleagues to stand up to the Department of Labor by 
supporting H.R. 1090.
  Ms. MAXINE WATERS of California. Mr. Speaker, I reserve the balance 
of my time
  Mr. HENSARLING. Mr. Speaker, I yield 2 minutes to the gentleman from 
Pennsylvania (Mr. Kelly).
  Mr. KELLY of Pennsylvania. Mr. Speaker, I rise in strong support of 
H.R. 1090. I think that we don't have to go back too far to look at 
what is happening here right now.
  It is almost a message to the American people: You poor, poor people. 
You can't possibly understand how to handle your physical health 
decisions. The government is going to have to step in and tell you how 
to handle your financial decisions because you just can't do it on your 
own.
  So we attack those people who make a living of giving good advice to 
people who don't have the ability to navigate a very difficult terrain 
when it comes to their retirement.

                              {time}  1730

  So who is always there to step in? That knight in shining armor, that 
parasitic leviathan that just can't wait to gobble up every single 
asset that the American people have.
  We talk about fiduciary responsibility. I would say that also falls 
in the House. Really, if you are acting in the best interests of those 
folks who you represent or those people whose problems you handle, you 
will probably get a chance to come back here. If you handle their 
retirement accounts the right way, they will probably keep you as their 
retirement adviser, and they will also refer you to other people who 
are having the same problem.
  Isn't it amazing that it always comes down to the government because 
they know so much better than everyday Americans about the way things 
should be done. When we have to go after some group, what we do is we 
raise the bar so high, we put so much responsibility on them that at 
the end of the day, they say: You know what? I can't pony up in this 
game anymore. I can't ante up. I am going to get out of here. Then who 
is left? Oh, my goodness, thank God for this safety net of a Federal 
Government that has done such a marvelous job with Social Security, 
that does

[[Page H7240]]

such a marvelous job of protecting everyday Americans.
  This is not a Republican initiative, and thank God for the 
gentlewoman from Missouri, the Show Me State, to show us what is 
happening here right now. The Department of Labor does not have to get 
involved in this. As has already been said, this is a solution hunting 
for a problem.
  Why don't we just use good common sense? When it comes to lower 
income people and lower middle-income people, they look to those folks 
who do financial advising to help them get through that night, that 
dark night and get ready for retirement. Why in the world would we turn 
our back on the people who generate all this revenue?
  Ms. MAXINE WATERS of California. Mr. Speaker, I continue to reserve 
the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I have no further speakers, and I am 
prepared to close.
  Ms. MAXINE WATERS of California. Mr. Speaker, I yield myself such 
time as I may consume.
  I think it is important for me to correct the Record about the U.K. 
investment advice experience. In predicting the worst outcome from the 
Department of Labor's rulemaking, my Republican colleagues frequently 
cite the United Kingdom. They argue small investors will lose access to 
their investment advice.
  Let me set the record straight. According to outside consultants for 
the U.K. Financial Conduct Authority: Eliminating commissions has 
reduced investment bias and has contributed to an improvement in the 
quality of advice.
  There is now more competitive pressure and lower product costs, and 
far from having an advice gap, there is excess capacity of about 5,000 
advisers in the U.K. market today according to an analysis by Towers 
Watson. There is no evidence that consumers have been forced to go 
without advice as a result of the regulation.
  I fear that we are comparing apples to oranges. That is because--
unlike the U.K. regulation--the DOL proposal is a modest update that 
does not ban commissions. Rather, the proposal seeks to simply ensure 
that persons providing retirement investment advice put the interests 
of their clients ahead of their own.
  This debate touches on a fundamental disagreement we continue to have 
in our respective parties. On the one hand, Democrats are acting on the 
belief that government should be the guardian of the interests of the 
people. It is a belief grounded in a fundamental truth: that our 
economy thrives with a rapidly growing and diverse middle class. For 
the middle class to grow, the American public must have confidence in 
our markets and be protected from bad actors.
  On the other hand, Republicans continue to act to protect the 
interests of a free market, driven by profit, even if it comes at the 
expense of the retirement savings of hardworking Americans. But we have 
seen the impact of the Republican free market on our economy, most 
recently in 2008, when the big banks on Wall Street, left to their own 
devices, caused the worst economic collapse in a generation, one that 
destroyed nearly $16 trillion in household wealth and 9 million jobs, 
displaced 11 million Americans from their homes, and doubled the 
unemployment rate.
  And yet my colleagues insist on advancing measures like H.R. 1090, 
which would encourage the continued exploitation of American workers 
and retirees on behalf of some financial advisers who put their own 
interests in profits first.
  The current rules governing the provision of retirement investment 
advice allow conflicts that harm everyday Americans working hard to 
ensure that they can retire with dignity. Every moment we delay in 
updating those rules, unscrupulous advisers benefit $1.4 billion a 
month at the expense of those everyday Americans.
  With such large industry profits at stake, this issue will continue 
to be a prime target for the Republican majority. But I encourage my 
colleagues to resist those who are more interested in lining their 
pockets than protecting the interests of American retirees and workers.
  I urge my colleagues to join me in voting ``no'' on H.R. 1090.
  Mr. Speaker, I yield back the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I yield myself such time as I may 
consume.
  Again, let me remind all that the administration that told the 
American people, ``If you like your doctor, you can keep them'' is now 
telling us, ``If you like your financial adviser, you can keep them.'' 
Not--not--in the face of the Department of Labor fiduciary rule.
  The ranking member just brought up the U.K. experience. Well, it is 
funny, we heard something completely different from what she described 
in our hearing. What we heard was, ``In the wake of the U.K. commission 
ban''--which, Mr. Speaker, is similar to what the DOL fiduciary rule 
is--``the largest banks have significantly raised the minimum account 
balances required before they will offer financial advice to 
investors.''
  The number of advisers serving retail accounts plunged by 23 percent. 
Tens of thousands are going without financial advice because their 
accounts aren't large enough. What my friends on the other side of the 
aisle would do by backing this DOL rule is take it away. You don't 
count. You are not rich enough to get any financial advice. You can't 
grow your savings.
  How ironic, Mr. Speaker, that the very same Department of Labor has 
come out with a study saying that investors who do not use investment 
advice are losing $114 billion a year. And yet what do my friends on 
the other side of the aisle do in cahoots with the Department of Labor? 
They take away--they take away--their professional advice.
  Here is a radical idea--and I admit it is radical--it is called 
freedom. Why don't we let the customer have the freedom of choice? My 
friends on the other side of the aisle use a red herring about 
disclosure and conflict of interest.
  There already are rules on the books. FINRA has disclosure rules, 
conflict of interest rules. We believe them. They ought to be enforced. 
If they are not obeyed, broker-dealers can have fines, they can lose 
their license. If they are fraudulent, the Department of Justice can 
criminally prosecute. That is a complete red herring.

  The issue here today is whether or not low- and moderate-income 
people can get access to financial advice under a commission-based 
model in order to grow their retirement accounts, so they can have the 
safety and security that so many Members of Congress already enjoy. Mr. 
Speaker, isn't that what is fair? Isn't that what is right? Why don't 
we have disclosure, and then why don't we let people choose?
  I just want to come here urging all Members to support H.R. 1090. I 
want to thank the gentlewoman from Missouri (Mrs. Wagner). She has been 
at the forefront of this battle all over the Nation. She should be 
recognized as the hero she is in fighting for working Americans' 
retirement security.
  I would urge that we all support this bill. It is so critical to the 
future retirement security of all those who struggle every day.
  We have got a case study right now in the U.K. We do not want to 
repeat this. Let's protect them. Let's enact H.R. 1090, the Retail 
Investor Protection Act.
  Mr. Speaker, I yield back the balance of my time.
  Mr. VAN HOLLEN. Mr. Speaker, today's legislation is very similar to a 
bill introduced by Rep. Wagner in the last Congress. I opposed that 
bill then, and for essentially the same reasons will oppose this bill 
now.
  As I indicated last year, I support consumer choice and believe there 
is room for a variety of different business models in the financial 
services marketplace. I also believe consumers have a right to full 
transparency regarding compensation arrangements and to recommendations 
from financial services professionals that are based on the consumers' 
best interests.
  In my judgment, the Department of Labor shares these convictions and 
has proposed a workable Fiduciary Rule that embodies both of these 
principles. Moreover, whenever our office has raised specific issues 
that we believed warranted further clarification or adjustment--from 
so-called level-to-level funding, to the appropriate distinction 
between education and advice, to the role of annuities and other 
insurance products in Americans' retirement security--we have found the 
Department both

[[Page H7241]]

knowledgeable about, and responsive to, the concerns being raised.
  While I support the Securities and Exchange Commission promulgating 
its own Fiduciary Rule, I do not believe the Department of Labor--or 
the retirement security of millions of Americans--can or should wait on 
action by the SEC. Accordingly, I oppose this legislation.
  The SPEAKER pro tempore. All time for debate on the bill has expired.


                  Amendment No. 1 Offered by Mr. Lynch

  Mr. LYNCH. Mr. Speaker, I have an amendment at the desk.
  The SPEAKER pro tempore. The Clerk will designate the amendment.
  The text of the amendment is as follows:

       Amend section 2 to read as follows:

     SEC. 2. RULES DEFINING CERTAIN FIDUCIARIES.

       (a) Rulemaking.--The Securities and Exchange Commission 
     shall issue a new or revised rule relating to standards of 
     conduct for brokers and dealers pursuant to the second 
     subsection (k) of section 15 of the Securities Exchange Act 
     of 1934 (15 U.S.C. 78o) not later than the end of the 60-day 
     period beginning on the date that the Secretary of Labor 
     issued a final rule based on the ERISA fiduciary rule.
       (b) Coordination Required.--In issuing a rule described 
     under subsection (a), the Securities and Exchange Commission 
     shall coordinate with the Secretary of Labor.
       (c) ERISA Fiduciary Rule Defined.--For purposes of this 
     section, the term ``ERISA fiduciary rule'' means the proposed 
     rule of the Department of Labor titled ``Definition of the 
     Term `Fiduciary'; Conflict of Interest Rule--Retirement 
     Investment Advice; Proposed Rule'', published April 20, 2015.

  The SPEAKER pro tempore. Pursuant to House Resolution 491, the 
gentleman from Massachusetts (Mr. Lynch) and a Member opposed each will 
control 5 minutes.
  The Chair recognizes the gentleman from Massachusetts.
  Mr. LYNCH. Mr. Speaker, I rise in support of my amendment to H.R. 
1090, the so-called Retail Investor Protection Act.
  Mr. Speaker, if adopted, my amendment would allow the Department of 
Labor to complete and adopt a rule to require that investment advisers 
act solely in the best interest of the workers and retirees who rely 
upon them in making financial decisions regarding their retirement.
  I bet most Americans think that financial advisers are already 
required to act in the retirees' best interest. Unfortunately, the bad 
news is that that is not the state of the law today. The good news, 
however, is that, hopefully, if we can defeat H.R. 1090--and the 
President has promised to veto this bill--that situation may be about 
to change.
  At the outset, it is important to remember that this issue concerns 
the retirement security of all Americans. It is important that we get 
this right.
  Congress, in its wisdom--obviously, this was a previous Congress--
gave the DOL exclusive jurisdiction regarding retirement plans under 
the Employee Retirement Income Security Act of 1974. In doing so, 
Congress recognized that retirement is different.
  Previous Congresses realized the importance of protecting workers and 
retirees by imposing a higher standard of care and loyalty upon 
financial advisers who offer services and sell stocks or bonds or other 
assets to be included in retirement plans. Again, that is because 
retirement is different.
  The basic idea of retirement plans works like this: if the average 
worker sets aside a small amount of wages regularly over 30 or 35 years 
that they are in the workforce and that amount is invested prudently 
and allowed to grow, then through proper investment and the miracle of 
compound interest, that worker will likely have a sizable nest egg upon 
which they can rely in retirement.
  Investing for retirement is also different in another context. It has 
grave consequences if it is done improperly or neglected. There is no 
second chance if you are at the end of your working life. You can't go 
back. This is your nest egg. It is tough to go out and get another job 
when you are at the age of retirement. You are out of time. So workers 
have a lot at stake.
  There are huge risks for workers if their retirement contributions 
over 30 years are not invested in a way that is in their best interest. 
They should be able to rely on the fact that their sacrifice, that 
their savings have been invested in a way that is in their best 
interest, not in the best interest of the financial adviser or the 
investment company. Again, however, that is not the case of the law 
today.
  Right now, most--but not all--financial advisers are often paid extra 
money, extra fees, a higher commission to offer a retiree or a worker 
particular advice or a particular product that are in the financial 
adviser's best interests because they carry higher fees or larger 
commissions, but those products and services may not be in the worker's 
or retiree's best interest.
  It is a basic law of economics. If financial advisers are paid more 
for recommending a particular fund over another, they will recommend 
that fund that they get paid more to recommend, even though it may not 
be in the client's best interest. That presents a classic example of 
conflict of interest.
  Now, I support rulemaking for a fiduciary standard by the DOL, and I 
agree that the SEC should thereafter harmonize its rules. Investment 
advisers should be held to a standard of care and loyalty to workers 
and retirees which requires that the adviser must act solely in the 
best interest of the worker who is investing for their retirement. 
However, H.R. 1090, in its current form, would harm people saving for 
retirement by blocking the DOL's rule and allowing financial advisers 
to act in their own financial interest instead of their client's best 
interests.
  In closing, I urge my colleagues to support this amendment. All 
investment advisers must be held to an essential standard of care and 
loyalty when providing advice to their clients, particularly clients 
who are saving for retirement.
  Mr. Speaker, I reserve the balance of my time.
  Mr. HENSARLING. Mr. Speaker, I claim the time in opposition.
  The SPEAKER pro tempore. The gentleman from Texas is recognized for 5 
minutes.
  Mr. HENSARLING. Mr. Speaker, this amendment essentially guts the 
Retail Investor Protection Act and puts the Department of Labor, once 
again, in the driver's seat to deny potentially millions of our fellow 
countrymen, low- and moderate-income people, the right to have their 
own financial adviser, the right to have financial advice on a 
commission basis.
  In many respects, the gentleman's amendment just gives us an 
opportunity to vote on the same matter twice, so I am not sure exactly 
what is being attempted to be achieved with this.

                              {time}  1745

  Again, Mr. Speaker, it is competition, it is innovation that has 
brought us something called the $7 trade. And my guess is, Warren 
Buffett doesn't necessarily need a $7 trade, but there are a lot of 
good folks, small business people, factory workers in Mesquite, farmers 
out near Mineola, Texas, good folks in the Fifth Congressional 
District, when they are planning for their retirement security, when 
they are trying to preserve their 401(k), their IRAs, they need that.
  Again, if we adopt the amendment of the gentleman from Massachusetts, 
we are right back to where we are--denying the ability for low and 
moderate-income people to have a choice in how they receive their 
financial advice, even if they will receive it. That is unacceptable, 
and I would urge a rejection of this amendment.
  Mr. Speaker, I reserve the balance of my time.
  Mr. LYNCH. Mr. Speaker, may I inquire how much time I have left?
  The SPEAKER pro tempore (Mr. Jolly). The gentleman from Massachusetts 
has 30 seconds remaining.
  Mr. LYNCH. Mr. Speaker, the heart of this matter is that my amendment 
just changes the standard upon which that advice needs to be made. The 
advice that we have in financial advisers giving to retirees and 
workers who desperately need the opportunity to invest, you know, these 
IRAs and retirement vehicles are a blessing to us. All it does is 
require that that advice be given without any conflict, that it be 
given in the best interest of the retiree or the worker who is making 
that investment. That is the only change here that is required.
  I think it is a good change. It is a necessary change. It is one for 
the American worker.
  I yield back the balance of my time.
  Mr. HENSARLING. Mr. Speaker, how much time do I have remaining, 
please.

[[Page H7242]]

  The SPEAKER pro tempore (Mr. Rodney Davis of Illinois). The gentleman 
from Texas has 3\1/2\ minutes remaining.
  Mr. HENSARLING. Mr. Speaker, I yield as much time as she may consume 
to the gentlewoman from Missouri (Mrs. Wagner), the author of H.R. 
1090, the Retail Investor Protection Act.
  Mrs. WAGNER. Mr. Speaker, I thank the chairman again for his support 
and all my colleagues who have come down here to the floor to speak on 
behalf of those low- and middle-income investors that need good, sound 
advice when it comes to their financial security and their retirement.
  We all agree that every American who is saving for the future 
deserves to have the very, very best advice based on the needs for 
their retirement investments and savings for the future.
  With all due respect to the gentleman from Massachusetts, what his 
amendment does is completely flip-flop the Retail Investor Protection 
Act. It says that the DOL should go ahead of the SEC.
  The Department of Labor is completely out of its lane when it comes 
to this particular matter. It is the Security and Exchange Commission 
that is absolutely the expert when it comes to promulgating any kind of 
rule, regulation, or oversight in this area.
  We have laws and rules already on the books, through FINRA, through 
the SEC, to make sure that savers are getting the best advice they 
possibly can for the future.
  It is clear in Dodd-Frank--and I find it almost impossible to believe 
that the minority thinks that somehow that Section 913 of Dodd-Frank, 
which says specifically that the SEC should take care of this space, 
should be promulgating rules and regulations and deciding how to go 
forward in this space, that somehow they now think that the Department 
of Labor should be allowed to promulgate, including addendums and 
exemptions, another thousand-page rule on the American people.
  Mr. Speaker, the American people are tired of this ``Washington knows 
best, top-down government.'' It is wrong. We have heard it from the 
chairman and others, whether it had to do with food, energy, or health 
care.
  I believe in freedom. I believe in the American people that they can 
choose their investment advice, their savings advice themselves, and 
they are entitled to that freedom and to their right.
  We do not need another government-promulgated, ``Washington knows 
best'' rule from the Department of Labor that is going to put access 
people, choice people, and cost those low- and middle-income investors 
out of this entire savings retirement future.
  So I implore my colleagues to reject the amendment from my colleague, 
Congressman Lynch, and to support the Retail Investor Protection Act, 
H.R. 1090.
  I thank the chairman for his time and effort and the entire committee 
and, again, all the colleagues, those who even wanted to come to the 
floor to speak on this issue because their constituents are so very 
concerned about their personal retirement savings and freedom.
  Mr. HENSARLING. Mr. Speaker, I would just urge all Members to vote 
for freedom, to vote for opportunity, to vote for empowerment of the 
farmers, the factory workers, the low- and moderate-income people, the 
single moms, all building a retirement security.
  Reject the amendment of the gentleman from Massachusetts, and vote 
for H.R. 1090, the Retail Investor Protection Act from the gentlewoman 
from Missouri (Mrs. Wagner).
  I yield back the balance of my time.
  The SPEAKER pro tempore. Pursuant to the rule, the previous question 
is ordered on the bill, as amended, and on the amendment by the 
gentleman from Massachusetts (Mr. Lynch).
  The question is on the amendment by the gentleman from Massachusetts.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. LYNCH. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 and clause 9 of rule 
XX, this 15-minute vote on adoption of the amendment will be followed 
by 5-minute votes on a motion to recommit, if ordered; passage of the 
bill, if ordered; and passage of H.R. 597.
  The vote was taken by electronic device, and there were--yeas 184, 
nays 246, not voting 4, as follows:

                             [Roll No. 574]

                               YEAS--184

     Adams
     Aguilar
     Bass
     Beatty
     Becerra
     Bera
     Beyer
     Bishop (GA)
     Blumenauer
     Bonamici
     Boyle, Brendan F.
     Brady (PA)
     Brown (FL)
     Brownley (CA)
     Bustos
     Butterfield
     Capps
     Capuano
     Cardenas
     Carney
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Conyers
     Cooper
     Costa
     Courtney
     Crowley
     Cuellar
     Cummings
     Davis (CA)
     Davis, Danny
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     DeSaulnier
     Deutch
     Dingell
     Doggett
     Doyle, Michael F.
     Duckworth
     Edwards
     Ellison
     Engel
     Eshoo
     Esty
     Farr
     Fattah
     Foster
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Garamendi
     Graham
     Grayson
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hahn
     Hastings
     Heck (WA)
     Higgins
     Himes
     Hinojosa
     Honda
     Hoyer
     Huffman
     Israel
     Jackson Lee
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Jones
     Kaptur
     Keating
     Kelly (IL)
     Kennedy
     Kildee
     Kilmer
     Kind
     Kirkpatrick
     Kuster
     Langevin
     Larsen (WA)
     Larson (CT)
     Lawrence
     Lee
     Levin
     Lewis
     Lieu, Ted
     Lipinski
     Loebsack
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham (NM)
     Lujan, Ben Ray (NM)
     Lynch
     Maloney, Carolyn
     Maloney, Sean
     Matsui
     McCollum
     McDermott
     McGovern
     McNerney
     Meeks
     Meng
     Moore
     Moulton
     Murphy (FL)
     Nadler
     Napolitano
     Neal
     Nolan
     Norcross
     O'Rourke
     Pallone
     Pascrell
     Payne
     Pelosi
     Perlmutter
     Peters
     Peterson
     Pingree
     Pocan
     Polis
     Price (NC)
     Quigley
     Rangel
     Rice (NY)
     Richmond
     Roybal-Allard
     Ruiz
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez, Linda T.
     Sanchez, Loretta
     Schakowsky
     Schiff
     Schrader
     Scott (VA)
     Serrano
     Sewell (AL)
     Sherman
     Sires
     Slaughter
     Smith (WA)
     Speier
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Titus
     Tonko
     Torres
     Tsongas
     Van Hollen
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters, Maxine
     Watson Coleman
     Welch
     Wilson (FL)
     Yarmuth

                               NAYS--246

     Abraham
     Aderholt
     Allen
     Amash
     Amodei
     Ashford
     Babin
     Barletta
     Barr
     Barton
     Benishek
     Bilirakis
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Bost
     Boustany
     Brady (TX)
     Brat
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Buchanan
     Buck
     Bucshon
     Burgess
     Byrne
     Calvert
     Carter (GA)
     Carter (TX)
     Chabot
     Chaffetz
     Clawson (FL)
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Conaway
     Cook
     Costello (PA)
     Cramer
     Crawford
     Crenshaw
     Culberson
     Curbelo (FL)
     Davis, Rodney
     Denham
     Dent
     DeSantis
     DesJarlais
     Diaz-Balart
     Dold
     Donovan
     Duffy
     Duncan (SC)
     Duncan (TN)
     Ellmers (NC)
     Emmer (MN)
     Farenthold
     Fincher
     Fitzpatrick
     Fleischmann
     Fleming
     Flores
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Garrett
     Gibbs
     Gibson
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Griffith
     Grothman
     Guinta
     Guthrie
     Hanna
     Hardy
     Harper
     Harris
     Hartzler
     Heck (NV)
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Hill
     Holding
     Hudson
     Huelskamp
     Huizenga (MI)
     Hultgren
     Hunter
     Hurd (TX)
     Hurt (VA)
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (OH)
     Johnson, Sam
     Jolly
     Jordan
     Joyce
     Katko
     Kelly (MS)
     Kelly (PA)
     King (IA)
     King (NY)
     Kinzinger (IL)
     Kline
     Knight
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Latta
     LoBiondo
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     Lummis
     MacArthur
     Marchant
     Marino
     Massie
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Messer
     Mica
     Miller (FL)
     Miller (MI)
     Moolenaar
     Mooney (WV)
     Mullin
     Mulvaney
     Murphy (PA)
     Neugebauer
     Newhouse
     Noem
     Nugent
     Nunes
     Olson
     Palazzo
     Palmer
     Paulsen
     Pearce
     Perry
     Pittenger
     Pitts
     Poe (TX)
     Poliquin
     Pompeo
     Posey
     Price, Tom
     Ratcliffe
     Reed
     Reichert
     Renacci
     Ribble
     Rice (SC)
     Rigell
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Rokita
     Rooney (FL)
     Ros-Lehtinen
     Ross
     Rothfus
     Rouzer
     Royce
     Russell
     Ryan (WI)
     Salmon
     Sanford
     Scalise
     Schweikert
     Scott, Austin
     Scott, David
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Sinema
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Stefanik
     Stewart
     Stivers
     Stutzman
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Trott
     Turner
     Upton
     Valadao
     Wagner
     Walberg

[[Page H7243]]


     Walden
     Walker
     Walorski
     Walters, Mimi
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Westmoreland
     Whitfield
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Young (IN)
     Zeldin
     Zinke

                             NOT VOTING--4

     Comstock
     Roskam
     Sarbanes
     Takai

                              {time}  1817

  Messrs. MEEHAN, GOHMERT, ROHRABACHER, and SAM JOHNSON of Texas 
changed their vote from ``yea'' to ``nay.''
  Mr. MURPHY of Florida and Ms. BASS changed their vote from ``nay'' to 
``yea.''
  So the amendment was rejected.
  The result of the vote was announced as above recorded.
  The SPEAKER pro tempore. The question is on the engrossment and third 
reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.
  The SPEAKER pro tempore. The question is on the passage of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mrs. WAGNER. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. This is a 5-minute vote.
  The vote was taken by electronic device, and there were--yeas 245, 
nays 186, not voting 3, as follows:

                             [Roll No. 575]

                               YEAS--245

     Abraham
     Aderholt
     Allen
     Amash
     Amodei
     Ashford
     Babin
     Barletta
     Barr
     Barton
     Benishek
     Bilirakis
     Bishop (MI)
     Bishop (UT)
     Black
     Blackburn
     Blum
     Bost
     Boustany
     Brady (TX)
     Brat
     Bridenstine
     Brooks (AL)
     Brooks (IN)
     Buchanan
     Buck
     Bucshon
     Burgess
     Byrne
     Calvert
     Carter (GA)
     Carter (TX)
     Chabot
     Chaffetz
     Clawson (FL)
     Coffman
     Cole
     Collins (GA)
     Collins (NY)
     Comstock
     Conaway
     Cook
     Costello (PA)
     Cramer
     Crawford
     Crenshaw
     Cuellar
     Culberson
     Curbelo (FL)
     Davis, Rodney
     Denham
     Dent
     DeSantis
     DesJarlais
     Diaz-Balart
     Dold
     Donovan
     Duffy
     Duncan (SC)
     Duncan (TN)
     Ellmers (NC)
     Emmer (MN)
     Farenthold
     Fincher
     Fitzpatrick
     Fleischmann
     Fleming
     Flores
     Forbes
     Fortenberry
     Foxx
     Franks (AZ)
     Frelinghuysen
     Garrett
     Gibbs
     Gibson
     Gohmert
     Goodlatte
     Gosar
     Gowdy
     Granger
     Graves (GA)
     Graves (LA)
     Graves (MO)
     Griffith
     Grothman
     Guinta
     Guthrie
     Hanna
     Hardy
     Harper
     Harris
     Hartzler
     Heck (NV)
     Hensarling
     Herrera Beutler
     Hice, Jody B.
     Hill
     Holding
     Hudson
     Huelskamp
     Huizenga (MI)
     Hultgren
     Hunter
     Hurd (TX)
     Hurt (VA)
     Issa
     Jenkins (KS)
     Jenkins (WV)
     Johnson (OH)
     Johnson, Sam
     Jolly
     Jordan
     Joyce
     Katko
     Kelly (MS)
     Kelly (PA)
     King (IA)
     King (NY)
     Kinzinger (IL)
     Kline
     Knight
     Labrador
     LaHood
     LaMalfa
     Lamborn
     Lance
     Latta
     LoBiondo
     Long
     Loudermilk
     Love
     Lucas
     Luetkemeyer
     Lummis
     MacArthur
     Marino
     Massie
     McCarthy
     McCaul
     McClintock
     McHenry
     McKinley
     McMorris Rodgers
     McSally
     Meadows
     Meehan
     Messer
     Mica
     Miller (FL)
     Miller (MI)
     Moolenaar
     Mooney (WV)
     Mullin
     Mulvaney
     Murphy (PA)
     Neugebauer
     Newhouse
     Noem
     Nugent
     Nunes
     Olson
     Palazzo
     Palmer
     Paulsen
     Pearce
     Perry
     Pittenger
     Pitts
     Poe (TX)
     Poliquin
     Pompeo
     Posey
     Price, Tom
     Ratcliffe
     Reed
     Reichert
     Renacci
     Ribble
     Rice (SC)
     Rigell
     Roby
     Roe (TN)
     Rogers (AL)
     Rogers (KY)
     Rohrabacher
     Rokita
     Rooney (FL)
     Ros-Lehtinen
     Ross
     Rothfus
     Rouzer
     Royce
     Russell
     Ryan (WI)
     Salmon
     Sanford
     Scalise
     Schweikert
     Scott, Austin
     Scott, David
     Sensenbrenner
     Sessions
     Shimkus
     Shuster
     Simpson
     Smith (MO)
     Smith (NE)
     Smith (NJ)
     Smith (TX)
     Stefanik
     Stewart
     Stivers
     Stutzman
     Thompson (PA)
     Thornberry
     Tiberi
     Tipton
     Trott
     Turner
     Upton
     Valadao
     Wagner
     Walberg
     Walden
     Walker
     Walorski
     Walters, Mimi
     Weber (TX)
     Webster (FL)
     Wenstrup
     Westerman
     Westmoreland
     Williams
     Wilson (SC)
     Wittman
     Womack
     Woodall
     Yoder
     Yoho
     Young (AK)
     Young (IA)
     Young (IN)
     Zeldin
     Zinke

                               NAYS--186

     Adams
     Aguilar
     Bass
     Beatty
     Becerra
     Bera
     Beyer
     Bishop (GA)
     Blumenauer
     Bonamici
     Boyle, Brendan F.
     Brady (PA)
     Brown (FL)
     Brownley (CA)
     Bustos
     Butterfield
     Capps
     Capuano
     Cardenas
     Carney
     Carson (IN)
     Cartwright
     Castor (FL)
     Castro (TX)
     Chu, Judy
     Cicilline
     Clark (MA)
     Clarke (NY)
     Clay
     Cleaver
     Clyburn
     Cohen
     Connolly
     Conyers
     Cooper
     Costa
     Courtney
     Crowley
     Cummings
     Davis (CA)
     Davis, Danny
     DeFazio
     DeGette
     Delaney
     DeLauro
     DelBene
     DeSaulnier
     Deutch
     Dingell
     Doggett
     Doyle, Michael F.
     Duckworth
     Edwards
     Ellison
     Engel
     Eshoo
     Esty
     Farr
     Fattah
     Foster
     Frankel (FL)
     Fudge
     Gabbard
     Gallego
     Garamendi
     Graham
     Grayson
     Green, Al
     Green, Gene
     Grijalva
     Gutierrez
     Hahn
     Hastings
     Heck (WA)
     Higgins
     Himes
     Hinojosa
     Honda
     Hoyer
     Huffman
     Israel
     Jackson Lee
     Jeffries
     Johnson (GA)
     Johnson, E. B.
     Jones
     Kaptur
     Keating
     Kelly (IL)
     Kennedy
     Kildee
     Kilmer
     Kind
     Kirkpatrick
     Kuster
     Langevin
     Larsen (WA)
     Larson (CT)
     Lawrence
     Lee
     Levin
     Lewis
     Lieu, Ted
     Lipinski
     Loebsack
     Lofgren
     Lowenthal
     Lowey
     Lujan Grisham (NM)
     Lujan, Ben Ray (NM)
     Lynch
     Maloney, Carolyn
     Maloney, Sean
     Marchant
     Matsui
     McCollum
     McDermott
     McGovern
     McNerney
     Meeks
     Meng
     Moore
     Moulton
     Murphy (FL)
     Nadler
     Napolitano
     Neal
     Nolan
     Norcross
     O'Rourke
     Pallone
     Pascrell
     Payne
     Pelosi
     Perlmutter
     Peters
     Peterson
     Pingree
     Pocan
     Polis
     Price (NC)
     Quigley
     Rangel
     Rice (NY)
     Richmond
     Roybal-Allard
     Ruiz
     Ruppersberger
     Rush
     Ryan (OH)
     Sanchez, Linda T.
     Sanchez, Loretta
     Sarbanes
     Schakowsky
     Schiff
     Schrader
     Scott (VA)
     Serrano
     Sewell (AL)
     Sherman
     Sinema
     Sires
     Slaughter
     Smith (WA)
     Speier
     Swalwell (CA)
     Takano
     Thompson (CA)
     Thompson (MS)
     Titus
     Tonko
     Torres
     Tsongas
     Van Hollen
     Vargas
     Veasey
     Vela
     Velazquez
     Visclosky
     Walz
     Wasserman Schultz
     Waters, Maxine
     Watson Coleman
     Welch
     Wilson (FL)
     Yarmuth

                             NOT VOTING--3

     Roskam
     Takai
     Whitfield

                              {time}  1825

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________