Secretary of Labor Thomas Perez said Friday that his department worked “very closely” with the SEC in crafting its proposed new fiduciary rule.
The secretary’s comment, made during an interview on CNBC, came after Republican lawmakers in both chambers of Congress filed formal requests with the DOL to provide documentation of all communications with the SEC relating to the rulemaking process.
Foes of the new proposed rule, which would impose a higher fiduciary standard on all brokers of securities, have claimed that the type of oversight the DOL would be given should statutorily be left in the jurisdiction of the SEC.
In a letter to Secretary Perez earlier this week, Rep. John Kline, R-Minnesota, and Rep. Phil Roe, R-Tennessee, suggested the Labor Department has been misleading in making claims it has coordinated with the SEC throughout the rulemaking process.
They cited recent remarks made by Republican SEC Commissioner Daniel Gallagher, an outspoken critic of the proposed fiduciary, or conflict of interest rule. “Despite public reports of close coordination between the DOL and SEC staff, I believe this coordination has been nothing more than a ‘check the box’ exercise by the DOL designed to legitimize the runaway train that is their fiduciary rulemaking,” Gallagher was quoted saying.
Perez dismissed that notion.
“I’ve personally met a number of time with (SEC) Chairwoman (Mary Jo) White,” said Perez, who was on CNBC to respond to last month’s stronger-than-expected jobs report.
“Our staffs have been working closely throughout,” he said, also claiming numerous meetings with financial industry representatives and consumer advocates.
In defending the proposal, Perez quoted Jack Bogle, Vanguard founder and proponent for a universally applied fiduciary standard, who told the Labor secretary that when customers’ interests come first, “that’s not only good for the customer, that’s good for business.”
“Lawyers and doctors have an obligation to look out for the best interest of clients. All we are saying is in the financial context, advisors should do the same,” said Perez, repeating a line of argument he and other advocates of the proposal have made repeatedly.
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Nick Thornton
Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.
