By executive order, Trump imposed a six-month delay on the so-called fiduciary rule implemented by the Obama Administration's Department of Labor and set to go into effect April 10. The idea ostensibly is to give policymakers time to review the rule and revise it if necessary. If you think the result of this process will be to make the rule more worker-friendly and less forgiving for banks, insurance companies and stockbrokers, then you don't know your Trump.
Put simply, the rule requires brokers and other financial agents to put the interests of their retirement-saving clients ahead of their own. This sounds like common sense, but the rule was vehemently opposed by the financial services industry and their mouthpieces in Congress. The reason for Wall Street's opposition should become obvious when one contemplates that conflicted advice cost customers an estimated $17 billion a year. That's the haul from brokers' and bankers' steering customers to inappropriate retirement investments that generate more fees for themselves.
The estimate comes from a 2015 report by the Obama
The delay of the fiduciary rule has been accompanied by a steaming helping of fatuous blather by Republicans and bankers about how the rule interfered with American workers’ “freedom” — presumably freedom to be ripped off. Here’s House Speaker
Amusingly, that's exactly what Wall Street lobbyists say about the rule, almost word for word. As for giving it "further study," the rule was the product of seven years of study by the Department of Labor, including several public hearings, hundreds of meetings with industry fronts and consumer advocates and invitations for public comments, of which thousands came in on both sides of the proposal. The only reason for further delay is to grease the skids for cancellation. Ryan knows this, so why doesn't he tell the truth about it?
Flanking Trump at a ceremony for the signing of the executive order was Rep.
The top three contributors to Wagner's reelection campaign in 2015-16 were the insurance, securities and commercial bank industries, which provided her with more than $600,000 in donations. That should lend some color to her claim at the event that this is "about Main Street."
These statements aim to distract listeners from the absurdity of Wall Street's claim that requiring honest disclosure of conflicts of interest will somehow bring the financial services edifice crashing down.
Until the Labor Department rule made its appearance, only registered investment advisors, a subset of the universe of people managing investments, were required to function as fiduciaries to their clients’ benefits. Investment and commercial bankers and insurance agents sedulously tried to fend off the same rule. At a hearing in 2010, Sen.
On CNBC Friday, White House economic advisor Gary Cohn defended the delay by declaring that he didn't "think you protect investors by limiting choices; you need to give them [investors] the proper sources to accumulate wealth." Cohn is a former Goldman Sachs investment banker. He collected a $285-million payout to leave the firm for the White House. Whose interest do you think he's got in mind?
Over the last couple of years the financial services industries attacked the Labor rule with ridiculous claims that it would prevent Americans from seeking advice from the advisors of their choice, make such advice more expensive and interfere with trusted relationships between customers and their advisors. The point of the rule, of course, was that millions of customers couldn't tell whether they should trust their advisors because the latter's conflicts of interest often are well-hidden, the product of secret fees and kickbacks.
The voices being raised against Trump's actions come from labor unions and consumer advocates, not members of Congress in the pockets of Wall Street firms.
President Trump continues his streak of throwing middle-class Americans under the bus — the very people he promised to protect on the campaign trail. "Rolling back conflict of interest protections … will take tens of billions of dollars a year from the pockets of hard-working Americans to enrich Wall Street," reads a statement issued jointly by the American Federation of State, County and Municipal Employees; Americans for Financial Reform; the Consumer Federation of America and Wall Street gadfly Better Markets. Adds the AFL-CIO: "Allowing financial advisers to scam retirees encourages the ugliest Wall Street behaviors that led to the financial crisis."
Trump's action prompts us to ask again which Americans he represents as president: the middle- and working-class Americans he claimed to be standing up for, or the bankers who were surrounding him Friday when he announced the fiduciary rule delay and plans to roll back the Dodd-Frank law, which put a leash on those same bankers after they crashed the economy in 2008?