“In a primarily partisan vote, the House passed the Financial Creating Hope and Opportunity for Investors, Consumers and Entrepreneurs Act, a highly controversial measure that stands virtually no chance to pass the Senate.”

In early February, President Trump directed agencies “to review two key Obama-era measures that were designed to protect consumers and the nation’s financial system.” The new proposal is an effort to repeal stringent Dodd-Frank rules, originally compiled in a bill passed in 2010 under the Obama administration in an effort to prevent future banking disorders experienced during the nationwide 2008 financial crisis.

Yesterday’s House vote occurred a day before the Labor Department fiduciary rule is set to go into effect requiring financial advisers to act in the best interests of their clients in retirement accounts. Seen as an overreach by some, Searcy Financial group explains the drawbacks that could result in a dramatic decrease in retirement savings:

When the Department of Labor issued their fiduciary rule, the theme was clear: when advising clients on retirement, advisors would legally be considered fiduciaries required to put their clients’ best interests before their own interests and excessive profits and loopholes would no longer stand. This sounds great for the investor, but what about the hidden consequences?

It was suggested advisors’ fees would need to increase to cover new requirements from the rule such as new disclosures and to help overcome loss of commissions. Some feared this would steer firms toward exclusively working with higher net worth individuals moving forward and potentially feel the need to fire their small clients to keep up revenue. There was also a concern that smaller clients might decide that paying higher fees for advice wasn’t worth it based on the amount of assets they have. In these cases, the small guy truly could lose, and a recent survey shows that advisors agree with this concern.

House Speaker Paul Ryan argues five points for the bill:

“While the Dodd-Frank Act may have had good intentions, it overreached and in practice hurt Main Street and consumers while providing more protections for Wall Street.”

 “The CHOICE Act will give regulatory relief to banks that keep 10% in cash reserves, which delivers relief while protecting consumers.”

“The bill is clear: Not a single dollar of taxpayer money will go to bailout Wall Street firms. Instead, it holds Wall Street accountable by imposing enhanced penalties for fraud and increasing transparency in the financial sector.”

“The Congressional Budget Office (CBO) estimates that the CHOICE Act will cut the deficit by $24 billion over the next 10 years.”

“The CHOICE Act restructures this agency under the Consumer Law Enforcement Agency and makes it accountable to Congressional oversight and the normal appropriations process.”