Senate poised to vote to repeal new retirement advice rule

Reuters News
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Posted: May 23, 2016 5:44 PM

WASHINGTON (Reuters) - The U.S. Senate on Tuesday will take up, and likely pass, a resolution to repeal a new Labor Department rule aimed at protecting retirement savers from profit-hungry brokers, a move that President Barack Obama has threatened to veto.

A notice sent to senators on Monday showed that a debate and vote on the resolution were scheduled for Tuesday morning, less than a week before the chamber recesses for the Memorial Day holiday. The vote requires a simple majority, which Republicans command in both houses of Congress. The House of Representatives passed its version of the resolution last month, in a vote along party lines.

But the resolution will have a short life span. Obama has threatened to veto legislation undoing a key financial initiative of his second term. His administration in April released the rule to set a fiduciary standard for financial brokers who sell retirement products, requiring them to put clients' best interests ahead of their bottom lines.

Republican leaders and some in the financial industry said complying with the rule would be expensive for brokers and result in higher costs for retirement advice that many Americans could not afford. They also said the rule did not take into account other laws and regulations on financial advice.

The Senate fight started early, with Senator Elizabeth Warren, a Democrat from Massachusetts, saying on Monday that Republicans wanted to "make it easier - easier - for giant Wall Street financial institutions to cheat Americans out of their retirement savings."

Speaking on the Senate floor, the advocate for stricter financial regulation also said the vote was motivated by election-year politics and that the resolution "will sure help fill up the campaign accounts of the Republican senators who vote for it."

(Reporting by Lisa Lambert and Richard Cowan; Editing by Peter Cooney)