May 24, 2016
The U.S. Senate is expected to vote on Tuesday to repeal a new Labor Department rule aimed at protecting retirement savers from Wall Street brokers.
Yes, you read that right.
The Labor Department rule, issued last month, requires financial advisors to adhere to a "fiduciary standard" that places client interests ahead of potential profits for themselves.
As Think Progressexplained in April:
Before the new standard, advisers were only required to give "suitable" advice, which left the door open for them to steer clients into products that made the advisers more money but weren't the best option. That practice was costing Americans an estimated $17 billion a year in conflicted advice, according to the White House. Some people say their finances, particularly their chances of retiring comfortably, have been destroyed by bad advice and that they would have simply been better off without it.
House Republicans last month passed a resolution to overturn the rule. With President Barack Obama already threatening to veto the measure, Labor Secretary Thomas Perez called the House vote "a waste of time."
Senate Republicans, who say the "paternalistic" rule will increase the cost of retirement advice, appear poised to pursue a similar charade. They need just a simple majority to send the bill to Obama's desk.
In a speech on the Senate floor on Monday, Sen. Elizabeth Warren (D-Mass.) expressed incredulity: "Why would anyone on Earth vote to overturn a rule designed to protect Americans from financial fraud?"
And then she answered her own question. "Why? Because it's an election year."
"The Senate will be voting be make it easier--easier--for shady financial institutions and unscrupulous financial advisors to mislead investors about the quality of investments so those advisors can continue pushing lousy products," she said.
"I will be voting no," she continued, "because we weren't sent here just to raise money for re-elections. If [Republicans] don't remember it soon, you better bet the American people will remind them in November."
Watch Warren's speech below:
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