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Rep. Wilson Introduces Bill to Delay Fiduciary Rule
On January 6, Rep. Joe Wilson (R-S.C.) introduced the Protecting American Families’ Retirement Advice Act, a bill that would delay by two years the effective date of the Department of Labor’s “fiduciary rule.” As discussed previously on InfoBytes, the fiduciary rule—which is presently set to take effect in April 2017—expands the definition of “investment advisor” to include a “wider array of advice relationships,” thereby imparting new standards on financial advisors and brokers handling retirement accounts. In a statement, Rep. Wilson described the Fiduciary Rule as “one of the most costly, burdensome regulations to come from the Obama Administration.” Wilson’s proposed legislation seeks to delay the rule’s implementation in order to “giv[e] Congress and President-elect Donald Trump adequate time to re-evaluate.”
Senate Republicans Announce Three New Banking Committee Members
On January 3, 2017, Senate Republican leadership released committee assignments for the 115th Congress, and in the process, announced the addition of three new Republican members of the Banking, Housing, and Urban Affairs Committee. Specifically, Sens. David Perdue (R-Ga.), Thom Tillis (R-N.C.) and John Kennedy (R-La.) have been assigned to the Committee, replacing Sens. Jerry Moran (R-Kan.), who was reassigned, David Vitter (R-La.), who retired last year, and Mark Kirk (R-Ill.), who lost his re-election bid. Looking ahead, committee chairs will be selected next week following a vote of the members of each respective committee and then ratified by the Senate Republican Conference.
OFR Releases 2016 Annual Report to Congress; Reveals Credit Extended Through "Shadow Banking" Exceeds That of Traditional Banks
On December 13, the Office of Financial Research (OFR) announced the release of both its 2016 Annual Report to Congress and its 2016 Financial Stability Report. The reports met the reporting requirements of the Dodd-Frank Act, including an analysis of: (i) threats to U.S. financial stability; (ii) key findings and insights from the OFR’s research; and (iii) the status of OFR efforts in meeting its mission. Among other things, the report noted the increasingly prominent role of shadow banking — “the extension of credit by nonbank companies, or credit funded by liabilities susceptible to runs because they are payable on demand and lack a government backstop.” According to the OFR, credit provided by the so-called shadow banking sector is presently higher than that of established banks. Indeed, OFR research indicates that credit from nonbank companies reached about $15.1 trillion as of the first quarter of 2016, thus making it "the major source of credit to U.S. businesses and households" — providing 38 percent of credit compared with banks' 32 percent.