Senator Elizabeth Warren (D-MA) and Representative Elijah E. Cummings (D-MD) argued that “insurers and financial firms provide much more optimistic assessments when they speak to their own investors” than in their “dire and unsupported public predictions and official comments to the Department of Labor about the impact of the proposed Conflicts of Interest rule.” In a letter addressed to DOL Secretary Thomas Perez and Office of Management and Budget Director Shaun Donovan, Senator Warren and Representative Cummings demonstrated this contrast with excerpts of “statements to investors” from “nine of the largest insurance companies in the country” that opposed the proposal. The statements were published in an article titled “Department of Labor: Don’t Make It Harder for Americans to Gain Guaranteed Income in Retirement.”
Senator Warren and Representative Cummings asserted that despite the “doomsday predictions” voiced in “Washington op-eds and comment letters” by insurers and financial firms, their statements to investors provided “a much more sanguine view of the impact of the rule,” and explained that the rule “will have few, if any, negative impacts on their financial advisers, their clients or their bottom line, and may even create new business opportunities.”
Lofchie Comment: Financial institutions are fighting the rule because they believe it will do them damage. If firms were genuinely indifferent, as the legislators suggest, they would not oppose the rule.