- The Washington Times - Wednesday, June 8, 2016

President Obama vetoed Wednesday a move by Congress to repeal the administration’s new regulations on financial advisers to guard against conflicts of interest.

In a veto message to Congress, Mr. Obama said the Labor Department rule “is critical to protecting Americans’ hard-earned savings and preserving their retirement security.”

The Senate approved a resolution 56-41 last month to overturn the rule.

“It is essential that these critical protections go into effect,” Mr. Obama said. “Because this resolution seeks to block the progress represented by this rule and deny retirement savers investment advice in their best interest, I cannot support it. I am therefore vetoing this resolution.”

It’s Mr. Obama’s 10th veto of his presidency.

He said before his administration imposed the new rules on fiduciary responsibility, outdated regulations “did not ensure that financial advisers act in their clients’ best interests when giving retirement investment advice.”

“Instead, some firms have incentivized advisers to steer clients into products that have higher fees and lower returns — costing America’s families an estimated $17 billion a year,” the president said.

It’s unlikely that Republicans in Congress will be able to muster enough votes to override the president’s veto, a feat they’ve never accomplished.

Senate Republicans approved the joint resolution, despite not having the 60 votes needed to overcome filibusters, by using the Congressional Review Act. It gives lawmakers 60 days to pass a resolution with a simple majority, although such measures that would repeal regulations still must be signed by the president.

Republican lawmakers said the rule will hurt middle-class investors by limiting their access to financial advice.

“This administration has been on a long regulatory march for years now, and too often, its regulations end up hurting the very Americans they purport to help,” Majority Leader Mitch McConnell, Kentucky Republican, said last month.

Rep. Phil Roe, Tennessee Republican who introduced the resolution, said the veto “threatens the retirement security of millions of working families.”

“The flawed fiduciary rule will make it harder for low- and middle-income workers to save for the future, limit the ability of individuals to receive basic financial advice, and jeopardize the creation of small business retirement plans,” said Mr. Roe.

• Dave Boyer can be reached at dboyer@washingtontimes.com.

Copyright © 2023 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.

Click to Read More and View Comments

Click to Hide