[Congressional Record Volume 161, Number 185 (Friday, December 18, 2015)]
[Extensions of Remarks]
[Pages E1823-E1824]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




    MILITARY CONSTRUCTION AND VETERANS AFFAIRS AND RELATED AGENCIES 
                        APPROPRIATIONS ACT, 2016

                                 ______
                                 

                               speech of

                         HON. THOMAS MacARTHUR

                             of new jersey

                    in the house of representatives

                      Thursday, December 17, 2015

  Mr. MacARTHUR. Mr. Speaker, I was disappointed to see there was no 
language in the Omnibus to delay the implementation of the Department 
of Labor's fiduciary proposal and allow the bipartisan proposal in the 
House to codify a workable fiduciary that would truly protect savers.
  The Department of Labor's (DOL) proposed fiduciary standard is a 
well-intentioned but poorly conceived proposal. I've expressed concern 
with a number of issues in the proposal in the past but I'd like to 
focus on the Department of Labor's legal authority over IRAs in my 
comments today.
  Congress explicitly designated employer-sponsored plans to the 
fiduciary standard under ERISA. Congress also explicitly designated 
IRAs to be governed by the Internal Revenue Code's prohibited 
transaction rules.
  DOL is simply not legally permitted to exert jurisdiction over IRA 
rollovers and to apply a fiduciary standard to IRAs without 
Congressional approval. Congress has amended ERISA and the tax code 
multiple times and has chosen repeatedly not to make this change. It is 
not legally permissible for an unelected bureaucrat from DOL to make 
that decision for the Congress, and the people we've been elected to 
represent back home.
  There are already a number of federal agencies that do have the 
authority to regulate financial transactions over individual IRAs, 
namely the SEC and FINRA. SEC and FINRA have a demonstrated record of 
education and enforcement to minimize any conflicts and

[[Page E1824]]

punish advisors who violate those standards. When advisors act against 
their clients' interests, they should and will be punished. It is 
unreasonable to place a prohibitive regime across an entire industry of 
professionals working in their client's best interest, rather than 
punish those who violate it.
  Former head of the Employee Benefits Security Administration 
(``EBSA'') Brad Campbell, the Department agency promulgating this 
regulation, testified at a recent hearing, ``This is a significant 
departure from the Department's traditional view of its authority 
regarding the application of the prohibited transaction rules to IRAs, 
in that it is attempting to leverage this authority to establish a 
fiduciary standard of care the statute does not provide.
  ``Testimony identifying a large number of significant technical 
problems with the Proposal, are a direct result of the Department's 
unfamiliarity with the IRA marketplace and with the role of other 
regulators in governing financial advice provided to IRAs. The 
Department is trying to force a square peg into a round hole by 
asserting that the ERISA fiduciary standards can and should apply to 
IRAs in addition to the existing regulatory regimes already in place.''
  I am a strong supporter of a best interest standard to protect our 
constituents when they receive advice on IRAs, but this proposal is 
based on doubtful legal authority and is unworkable in practice. It 
will lead to our nation's most vulnerable savers receiving no financial 
advice at all, at a time when they need it most.
  Again, I appreciate the DOL's intentions in promulgating these 
regulations but I believe they are out of their area of expertise and 
it is reflected in the quality of the proposal. I hope the DOL plans to 
work with Congress as we progress on our bipartisan best interest 
standard that will be codified into law, rather than continue to 
attempt to overstretch the authority given to them by the Congress. 
Congress will continue to protect our constituents' best interests and 
assert our authority over the issue.

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