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Financial CHOICE Act

The House of Representatives approved the Financial CHOICE Act, which serves to revamp the Dodd-Frank reform law and derail the Department of Labor (DOL) Fiduciary Rule. It does not allow the DOL to advance the Rule until the SEC proposes its own retail investment advice rule. The Act is backed by House Republicans, with Democrats opposed, as it would eliminate fiduciary rule protections for investors that require financial advisers to act in the best interests of their clients with regard to their retirement accounts. Alternative bills have been introduced by House Republicans. One that eliminates the fiduciary rule but establishes an alternative best interest standard that would “enhance transparency and accountability” through simple and relevant disclosure requirements. Another requires financial advisers to clearly communicate key information to ensure investors are well informed to make investment decisions. Neither bill has Democratic support. On June 7, Labor Secretary Alexander Acosta testified in a congressional hearing that a pending request for information “will allow the agency to collect data and analyses that could become the foundation for rulemaking to change the regulation.”; June 8, 2017.