Home / News / BCA Washington Briefing / U.S. Chamber Concerned with Administration’s Final Rule that will Hurt Middle-America Savers

U.S. Chamber Concerned with Administration’s Final Rule that will Hurt Middle-America Savers

401knewsavingrules

On Wednesday the Obama Administration’s Department of Labor released its final redefinition of a fiduciary rule under the Employee Retirement Security Act and initiated one of the biggest changes to the retirement system in the history of the 401(k). The rule will push Americans out of private investment accounts in private IRAs and into government-run accounts.

The U.S. Chamber of Commerce is concerned whether the DOL has fixed significant flaws in the original draft rule proposal, which would have created chaos in the marketplace and excessively harmed small businesses by restricting access to retirement investment advice and limiting savings.

According to the Wall street Journal, the Labor Department says that its so-called fiduciary rule will make financial advisers act in the best interests of clients. What Labor Secretary Thomas Perez doesn’t say is that the rule carries such enormous potential legal liability and demands such a high standard of care that many advisers will shun non-affluent accounts.

It’s no coincidence that middle-income investors may be forced to look elsewhere for financial advice even as Obama enables a raft of new government-run competitors for retirement savings, the Journal said.

Labor’s new rule kicks in Jan. 1. It says that financial firms advising workers moving money out of company 401(k) plans into IRAs will have to follow the new higher standards. Labor has proposed waivers so that new state-run retirement plans don’t have the same regulatory burden as private employers.

Private competitors will be the losers and the main question is exactly how many billions of dollars in costs and lost opportunities will hit investors and how big the incentive will be to seek government options, the WSJ reported.


 

U.S. CHAMBER SAYS “RED” STATES GET BRUNT OF CARBON REDUCTION BURDEN

The U.S. Chamber of Commerce says that states that oppose the Obama Administration’s carbon reduction rules will be required to reduce emissions eight times more than states that support the president’s plan, including two states that don’t have to reduce emissions at all.

The U.S. Chamber, along with 166 state and local chambers of commerce and business associations from 40 states including the BCA, support those 28 states fighting the CPP. Alabama is one of 28 states challenging the rule.

Opponents will bear 81 percent of the brunt of carbon emission reduction. Eighteen states such as California, Oregon, Washington State, and states in the Northeast including New York which produce far more carbon than Alabama but support the president’s plan, will be required to reduce only 10 percent of the emissions.

After EPA’s released its set of regulations intended to cut carbon emissions from the power sector, states sued the federal government and won a stay.

Right now 28 states are challenging the Clean Power Plan and 18 states support it, the Chamber said. The important difference is that states opposing the plan will be required to come up with 81 percent of the total carbon emissions, while the states backing the CPP have to come up with only 10 percent.

States fighting the CPP rely more on affordable, abundant coal for electricity know they’ll be the big losers, and so have a lot more at stake than the states defending the CPP.

For example, Texas is required to reduce carbon emissions by 51 million tons-nearly as much as the 57 million tons of reductions required by the 18 EPA-defending states combined. Two states, Hawaii and Vermont that don’t have to reduce their emissions at all, are defending the CPP in court.


 

IN CASE YOU MISSED IT

Trade Secrets Protection Bill Passes Senate
Bloomberg (Dennis 4/4) “The Senate easily passed a bill Monday allowing corporations to make a federal case of the theft of trade secrets, with backers hoping the House will quickly send it to President Barack Obama’s desk. The overwhelming 87-0 vote came after the bill providing for federal lawsuits to protect trade secrets received broad backing from the business community, the White House and lawmakers in both parties.

“The White House said Monday that it ‘strongly supports’ the trade secrets bill, saying in a statement that the measure ‘would provide businesses with a more uniform, reliable, and predictable way to protect their valuable trade secrets anywhere in the country’.

“National Association of Manufacturers President Jay Timmons applauded the Senate’s action. ‘These days, a competitor can steal that knowledge with the click of a mouse, costing a company good-paying jobs or even its entire business,’ Timmons said in a statement. ‘This is a critical issue facing manufacturers, one that will define competition and success in the 21st century. That’s why we need all the tools possible to protect the superior knowledge and products that set our industry apart’.

“The bill, S. 1890, was approved by voice vote in the Judiciary Committee in January. A House companion measure, HR. 3326, has 128 co-sponsors. The House Judiciary Committee has yet to act on a companion trade secrets bill, although it backed a similar measure in the previous Congress’.

“Groups that [support the measure] included the Biotechnology Industry Organization, BSA|The Software Alliance, Medical Device Manufacturers Association, the National Association of Manufacturers, and the U.S. Chamber of Commerce.”

 

Feds Ease Regulatory Burden for New Banks
Birmingham Business Journal (Hoover 4/6) “The Federal Deposit Insurance Corp. is easing regulatory burdens on new state-chartered banks, a move that could bring more competition to the banking industry and make it easier for small businesses to get loans.

“The FDIC is reducing its period of heightened supervisory monitoring of newly formed banks from seven years to three years. This reverses a move made by the FDIC in 2009, when ‘an elevated number’ of new banks had either failed or been identified as problem banks during the financial crisis, the agency stated. Since then, new regulations, guidance and more forward-looking supervision have been adopted for all banks, the FDIC noted, making the seven-year period unnecessary.

“‘Encouraging the formation of new banks is in the public’s interest’, said FDIC Chairman Martin Gruenberg. ‘The entry of new banks has helped to preserve the vitality of the community banking sector over time’, he said. ‘De novo institutions fill important gaps in our local banking markets, providing credit and service to communities that may be overlooked by larger institutions’.

“Only two de novo banks have been approved by regulators since 2011, however, compared with an average of 100 new banks formed per year before the seven-year enhanced supervision period was adopted, said Camden Fine, president and CEO of the Independent Community Bankers of America.”

About Dana Beyerle

Dana Beyerle
Director of Communications
(334) 240-8768 | Fax: (334) 241-5984
Email Dana Beyerle

Check Also

Dodd-Frank Rollback Goes to House

U.S. Sens. Richard Shelby, R-Tuscaloosa, and Doug Jones, D-Mountain Brook, voted Wednesday to pass bipartisan …