Business

Sen. Scott: DOL should go back to drawing board on financial adviser rule

by Kevin Cirilli - 07/29/15 5:35 PM ET

Sen. Tim Scott (R-S.C.) is calling on the Department of Labor to re-propose its plan to regulate financial advisers.

In a brief interview with The Hill, Scott said that “there should be a re-proposal” of President Obama and DOL’s effort to change disclosure requirements under its so-called fiduciary rule.

Scott and the business community have argued that the proposed regulation would end up keeping low- and middle-income Americans from receiving financial advice.

“Let’s stop and study and do something that allows for us to say, ‘Wait a second — let’s figure out what the real impacts are and not see this from a clinical digestion of facts and from an academic environment,'” Scott said.

“In the real world — having sold financial products — the fact of the matter is that what they’re going to do is eliminate experts for those who need it the most.”

The administration — backed by progressive groups and liberal lawmakers including Sen. Elizabeth Warren (D-Mass.) — argues that the new disclosure requirements are needed so consumers know that their advisers might be earning commissions off their financial advice sales.

Scott’s comments come as a bipartisan group of lawmakers on the House Financial Services Committee sent a letter to Labor Secretary Thomas Perez calling for a re-proposal.

Two Democrats joined 18 Republicans in signing the letter, which was circulated by Reps. Ann Wagner (R-Mo.), Andy Barr (R-Ky.), David Scott (D-Ga.) and Lacy Clay (D-Mo.).

Rep. Scott told The Hill that he expects more Democrats will come out against the administration’s plan, which failed in 2010.

“You can sit in an ivory tower and make up all of these [seemingly] wonderful things, but they don’t have practicality of making sure it doesn’t suffocate our financial system,” Rep. Scott said. “Furthermore, the people who hurt the most with this proposal are those in the lower income stream and the middle income stream.”

Tags Andy Barr Elizabeth Warren Thomas Perez Tim Scott