The Congressional Black Caucus is warning the Department of Labor that its plan to extend ERISA's fiduciary standard to IRAs will hurt African-American savers.
In a March 15 letter to the DOL, eight members of the caucus, who are also members of the House Financial Services Committee—including Rep. Maxine Waters, D-Calif., ranking member on the committee—said that if brokers who serve IRA accounts are held to "ERISA's strict prohibitions on third-party compensation, they may choose to exit the market rather than risk the potentially severe penalties under ERISA for violations." If that occurs, "it could cause IRA services to be unattainable by many retirement savers in the African-American community."
This isn't the first time that lawmakers, or industry officials, have balked at DOL's decision to extend ERISA fiduciary standards to IRAs. As Brad Campbell, former head of the DOL's Employee Benefits Security Administration, who's now with Drinker Biddle and Reath in Washington, recently told AdvisorOne, "I think [DOL] not only will continue to apply the rule to IRAs much as originally proposed, but is likely to propose new restrictions on solicitation of IRA rollovers."
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Melanie Waddell
Melanie is senior editor and Washington bureau chief of ThinkAdvisor. Her ThinkAdvisor coverage zeros in on how politics, policy, legislation and regulations affect the investment advisory space. Melanie’s coverage has been cited in various lawmakers’ reports, letters and bills, and in the Labor Department’s fiduciary rule in 2024. In 2019, Melanie received an Honorable Mention, Range of Work by a Single Author award from @Folio. Melanie joined Investment Advisor magazine as New York bureau chief in 2000. She has been a columnist since 2002. She started her career in Washington in 1994, covering financial issues at American Banker. Since 1997, Melanie has been covering investment-related issues, holding senior editorial positions at American Banker publications in both Washington and New York. Briefly, she was content chief for Internet Capital Group’s EFinancialWorld in New York and wrote freelance articles for Institutional Investor. Melanie holds a bachelor’s degree in English from Towson University. She interned at The Baltimore Sun and its suburban edition.
