My district’s HR rep: Barry Loudermilk, is fundamentally anti-social

“A costly Department of Labor rule is wreaking havoc on small investors saving for their retirement. That’s why I’ve signed onto three letters and co-sponsored several bills to prevent these harmful regulations from continuing to hurt hardworking Americans.”

As the comment-letter deadline for the Labor Department’s fiduciary rule hits, industry organizations warn of orphaned accounts.
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The above statement by Rep. Loudermilk oozes with the standard misdirection phrasing used to disguise the real intent and content of such pronouncements. His actions do not help “hardworking Americans”…instead they help the FIRE money-changers by removing fiduciary responsibility to clients by brokers and other “money management” entities. The FIRE industry in general is opposed to any regulation that requires anyone who presents themselves as working for the best interests of a client actually is required by law to do so; instead they favor money management in the “casino style”, where some clients will make money, but the entire enterprise is oriented toward making sure the house will always win.
Richard Pressl Hint: the well-off, the privileged, the elites don’t NEED the Government to assist them…they have proven capable of self-obtaining. Making it EASIER for elites to extract MORE from common resources was considered sinful by Jesus….and Karl Marx….and me.

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Richard Pressl Too many initiatives by Congress, and the President “sound” at first glance like useful proposals – but upon closer examination are simply efforts to assist their base at the expense of average Americans. It really doesn’t matter what pleasant sounding phrase they assign to proposed legislation – when the obvious affect is unctuous theft from the Commons.

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Todd Wermers The article our congressman has linked to needs further explanation. Mr. Loudermilk is rolling back consumer protections here, which will benefit brokers in 401k and IRA funds. It will not benefit the majority of his constituency.

First of all, here is the rules that were in place prior to 2010. This is called the Fiduciary Standard and it was enacted in 1940 after the Great Depression to protect consumers.

“The anti-fraud provisions of the Investment Advisers Act of 1940 and most state laws impose a duty on Investment Advisors to act as fiduciaries in dealings with their clients. This means the adviser must hold the client’s interest above its own in all matters. The Securities and Exchange Commission (SEC) has said that an adviser has a duty to:

1) Make reasonable investment recommendations independent of outside influences
2) Select broker-dealers based on their ability to provide the best execution of trades for accounts where the adviser has authority to select the broker-dealer.
3) Make recommendations based on a reasonable inquiry into a client’s investment objectives, financial situation, and other factors
4) Always place client interests ahead of its own.”

OK, now here is the rule Barry is referring to that was enacted in 2010 to expand these key protections above.

“In July 2010, The Dodd–Frank Wall Street Reform and Consumer Protection Act mandated increased consumer protection measures, including enhanced disclosures and authorized the SEC to extend the fiduciary duty to include brokers rather than only advisers regulated by the 1940 Act.”

So in other words, those 4 items implemented in the 1940’s that apply to advisers? They now apply to brokers as well which is a good thing. There was a slight problem with this though and the rules were revised further. Read on below.

“In June 2016, as a way to address adviser conflicts of interest, the Department of Labor (DOL) ruled in a redefinition of what constitutes financial advice, and who is considered a fiduciary. Prior to 2016, fiduciary standards only applied to Registered Investment Advisers (RIAs), and did not impact brokers, who previously operated under a less strict “suitability” standard that provided leeway to provide education without “advice.” The new ruling requires all financial advisers who offer advice for compensation to act as fiduciaries and meet the fiduciary standard, but only when dealing with retirement accounts such as IRAs or 401(k)s.
The ruling includes one exemption for brokers, Best Interest Contract Exemption (BICE), which can be allowed if the broker enters into a contract with the plan participant and meets certain behavioral requirements. The new ruling does not impact the advice or investment product sales pertaining to non-retirement accounts.”

Barry is proposing rolling back those latest protections to consumers from Dodd Frank and it’s 2016 revision. The protections he would roll back currently apply only to brokers who deal with retirement accounts such as 401K’s and IRA’s. This will have the effect of investment brokers once again making poor choices in the best interests of themselves, rather than consumers.

I urge anyone reading this to contact your senators and the president and urge them to either vote NO or veto this bill.

1 comment to My district’s HR rep: Barry Loudermilk, is fundamentally anti-social

  • Preston Richards

    The efforts of Rep. Loudermilk are NOT directed toward helping “hard working Americans”, nor job holders – instead they are aimed at benefiting money handlers by removing the requirement that brokers and agents must demonstrate a fiduciary responsibility to their client’s. Here is a full description of the DOL Fiduciary Rule:
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    http://www.investopedia.com/updates/dol-fiduciary-rule/

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