Vote Explanation for H.R. 1090

10/27/2015

Today, the House passed the Retail Investor Protection Act (H.R. 1090), which would prevent the Department of Labor from issuing a final rule aimed to strengthen investor protections when dealing with financial advisors and broker-dealers that make investments on their behalf.

Under current law, both the Securities and Exchange Commission (SEC) and the Department of Labor (DoL) regulate the financial service sector. The 2010 Dodd-Frank law directed the SEC to study whether new rules and standards were needed to better protect investors and eliminate possible conflicts of interest that financial advisors may have when advising their clients. The SEC’s study determined that better protections were needed, but it did not issue a proposed rule. Instead, DoL issued its own rule in April 2015 based on the SEC study which has yet to be finalized. H.R. 1090 would prevent DoL from moving forward and issuing a final rule on this issue.

I voted against this bill because I think the legislation prematurely addresses a rule that has yet to be finalized by the federal government and may or may not be appropriate. If Congress would like to debate whether or not certain parts of the rule should be changed because of unintended consequences it should wait until the rule is finalized.

I believe passing this legislation sets a dangerous precedent that would hinder future SEC and DoL efforts at protecting consumers and avoiding past practices that led to the 2008 financial crisis.

I have also spoken with financial advisors in El Paso to better understand H.R. 1090 and its potential impact on their industry. Among other issues, I agree with their concern that financial advisors already abide by and adhere to regulations from three governing bodies on the state and federal levels combined, and H.R. 1090 may add to that burden by requiring financial advisors to follow additional regulations. Alternatively to H.R. 1090, I believe Congress can play a more productive role by addressing and streamlining the number of federal agencies required to conduct fiduciary oversight as it relates to investment advisors and broker-dealers. In doing so, we can provide greater certainty to these professionals while reducing unnecessary or redundant red-tape. I will continue to look for ways to work with my colleagues to achieve that goal.

H.R. 1090 passed the House and is now pending in the Senate. However, the President has indicated he would veto the bill.

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