Dive Brief:
- A bill that seeks to repeal the Dodd-Frank Act passed the House in a 233-186 vote Thursday, supported only by a House Republican majority, Bloomberg reported. But the new bill already faces problems — namely, a Senate that has expressed little interest in it.
- The Financial Choice Act would completely repeal the fiduciary rule and potentially cause trouble for the pay-ratio rule, currently under examination by the SEC.
- However, for the bill to get through the Senate, some Democrats would have to vote in favor of it, and there is little incentive for them to pass the Choice Act in its current form, The New York Times reports. While some aspects of the bill could see bipartisan support, it's unlikely the more dramatic cuts — including the gutting of the Consumer Financial Protection Bureau — would survive.
Dive Insight:
The bill's current iteration remains strikingly unlikely to survive, especially since Republicans are busy trying to figure out their healthcare bill. But its another example of the Trump administration's willingness to remove regulations put into place under Obama.
Either way, some aspects of Dodd-Frank that affect employers are already in place. The fiduciary rule goes partially into effect today. As of June 9, brokers and advisers are required to act as a fiduciary to clients and work in the best interest for those they serve. Business groups were largely opposed to the rule and hoped that the Trump DOL would continue to delay it, but Secretary Alexander Acosta held to the rule-making process, claiming that there were no feasible legal reasons to continue its delay. Enforcement of the requirement is not expected to be a priority while the DOL looks for other ways to undo the requirement.
The pay-ratio rule continues to worry employers, as well. As part of guidance under Dodd-Frank, the CEO pay-ratio rule requires that employers publicly disclose the differential between the CEO's pay and its employees' earnings. The SEC recently opened the rule up to public comment once again, meaning its future may be more uncertain than the fiduciary rule's was. But as of right now, employers need to ensure they are in compliance with the rule, as it is still scheduled to go into effect next year.
