Tuesday, October 29, 2013

30 House Democrats Joined the GOP to Sell You Out to Wall Street. Which Ones?

Republicans and conservative Democrats just voted to sell you out to Wall Street. In other words, it's Tuesday.

Today, the House passed the so-called Retail Investor Protection Act 254 to 166.  30 Democrats voted with 224 Republicans in favor. 165 Democrats--and one Republican--voted against it. Those following H.R. 2374 thought it would pass with wide bipartisan margins, so having 165 Democratic NAY's was better than expected. The 30 Democratic YEA's still need to be named and shamed, however.

First, let's begin with the important question: What is the Retail Investor Protection Act? The bill delays a new Department of Labor rule that would prevent financial advisers from stealing from your 401(K) plans or IRAs. Allowing financial advisers to rip you off is a great complement to that other plank in the Republican-Conservadem retirement insecurity platform, cutting Social Security.

Here's David Dayen with more details:
The Labor Department proposal, known as the “fiduciary rule,” would change the ethical standards by which employer-based retirement products like 401(k)’s and IRAs are marketed and sold. The rule has not been updated since 1975, before 401(k)’s and IRAs even existed. The Labor Department wants to broaden the definition of a “fiduciary” to cover all financial advisers who offer individual investment advice for a fee. Under the rule, they would be legally required to work in the best interest of their clients. For example, a fiduciary would not be able to push investment products on customers in which they have a financial stake. The agency defines the goal of the proposal as “to ensure that potential conflicts of interest among advisers are not allowed to compromise the quality of investment advice that millions of American workers rely on, so they can retire with the dignity that they have worked hard to achieve.” ...
Currently, it is depressingly common for financial advisers, more than 80 percent of whom are not fiduciaries, to self-deal when offering advice. First off, they obtain large fees from the retirement products they sell. According to the think tank Demos, a median-income, two-earner household will pay $155,000 during their lifetime to financial advisers on average. (The lifetime gains for two-earner households from retirement accounts are around $230,000, meaning that nearly two-thirds of the profits go to the industry.) Second, non-fiduciary financial advisers can enjoy kickbacks; right now there is no rule against an adviser from a mutual fund company encouraging clients to put their money in specific funds sold by that company. In fact, that’s the norm, and the adviser typically receives a commission for the sale.

Conflicts of interest like this cost retirement investors at least $1 billion a month, because the funds they get channeled into underperform the alternatives. Financial advisers also encourage rollovers into high-cost IRAs when an individual changes jobs. None of these schemes have to be disclosed to the customer, under the current standard. The National Bureau for Economic Research found in a recent study that “adviser self‐interest plays an important role in generating advice that is not in the best interest of the clients.”
So in the middle of a retirement crisis, when the majority of Americans already aren’t accumulating the savings they need to maintain their standard of living, sellers of retirement products are skimming close to $60 billion a year off the top through deceptive practices, making a bad situation even worse.
Now that we know what it is, let's move to the next question: Who voted for it? 
The lone Republican NO was Walter Jones (NC-03).

And here are the 30 Democratic YEA votes. Most of their names should look familiar if you've seen any of my past roll call diaries.

John Barrow (GA-12)
John Carney (DE-AL)
Gerry Connolly (VA-11)
Jim Costa (CA-16)
Henry Cuellar (TX-28)
John Delaney (MD-06)
Ted Deutch (FL-21)
Bill Foster (IL-11)
Pete Gallego (TX-23)
Joe Garcia (FL-26)
Denny Heck (WA-10)
Jim Himes (CT-04)
Derek Kilmer (WA-06)
Ron Kind (WI-03)
Rick Larsen (WA-02)
Dan Maffei (NY-24)
Jim Matheson (UT-04)
Mike McIntyre (NC-07)
Gwen Moore (WI-04)
Patrick Murphy (FL-18)
Bill Owens (NY-21)
Ed Perlmuter (CO-07)
Scott Peters (CA-52)
Gary Peters (MI-09)
Collin Peterson (MN-07)
Bradley Schneider (IL-10)
Kurt Schrader (OR-05)
Brad Sherman (CA-30)
Kyrsten Sinema (AZ-09)
Filemon Vela (TX-34)

Note the appearance of Gary Peters on the list. He’s racked up quite the number of awful votes since he declared his intention to run for Carl Levin’s Senate seat. He must be doing it for the fundraising.

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