Advocacy in action blog

The U.S. Department of Labor has proposed a new rule to govern the standard of care for producers providing consumers with retirement guidance and products. NAIFA was a part of the lawsuit, along with the American Council of Life Insurers and other groups, that resulted in the DOL’s original fiduciary rule being struck down by the Fifth Circuit Court of Appeals in 2018. The new proposal would create a “best interest” prohibited transaction exemption (PTE) for ERISA- and Internal Revenue Code-covered investment advice fiduciaries.

In an opinion published last Friday, the Second Circuit Court of Appeals upheld the validity of the SEC’s Regulation Best Interest and rejected the challenge to the rule which had been filed last fall by a group of state attorneys general and several private financial firms. The court did not agree with the plaintiffs’ claim that the Dodd Frank Act required the SEC, if it chose to act, to adopt a standard of conduct for broker-dealers that paralleled the fiduciary standard applicable to investment advisers under the Investment Advisers Act.

SEC Chairman Jay Clayton issued a statement June 15 reminding financial firms and advisors of the new, enhanced conduct standards found in Regulation Best Interest. Reg BI requires broker-dealers and their representatives to act in the best interest of their clients when making recommendations, and to not put the firm’s or representatives’s financial interests ahead of the consumer’s.

On June 17, the U.S. Small Business Administration, in consultation with the Department of the Treasury, posted a revised, borrower-friendly Paycheck Protection Program (PPP) loan forgiveness application implementing the PPP Flexibility Act of 2020, signed into law by President Trump on June 5, 2020.  In addition to revising the full forgiveness application, SBA also published a new EZ version of the forgiveness application that applies to borrowers that:

NAIFA’s advocacy team and grassroots army have been engaged from the beginning of conronavirus-related shutdowns with Congress, state legislatures, and federal and state regulators on proposals to provide economic relief and recovery assistance to individuals, families, and small businesses. We provided input to Congress as they shaped the first three phases of COVID-19 legislation, including the Paycheck Protection Program.

NAIFA will celebrate its 130th anniversary Thursday, June 19, with an online Town Hall meeting “The State of NAIFA on Our 130th Anniversary Celebration.”

Registered index-linked annuity (RILA) products offer a good option for some consumers who want to benefit from market growth while reducing their exposure to market losses. These are long-term, tax-deferred investments that are often well-suited for investors who are preparing for retirement, especially those who are retired or are nearing retirement and wish to reduce the impact of market downturns.

Last week NAIFA issued a joint statement with industry association partners to denounce racial injustice. NAIFA has always advocated for financial security for all and the responses we received to our statement were overwhelmingly positive. Our active pursuit of racial equality does not support violence or any activity that works against financial security—including looting, marring our national monuments and destroying private property. We are further saddened by the damage done through rioting and in no way condone these activities as a method of protest.

The U.S. Senate has passed the Paycheck Protection Program Flexibility Act that would increase the program’s loan period for borrowers seeking forgiveness from eight weeks to six months. The legislation would also expand the ability of small businesses to use PPP funds to pay rent, mortgages, utilities, and other essential business costs. The bill keeps the obligations requiring recipients seeking loan forgiveness to avoid layoffs and provide worker protections. The House of Representatives had previously passed the bill, and the president is expected to sign it into law.

Sen. Tim Scott (R-SC) had some interesting things to say on the Politico "Morning Money" program about the economic recovery and the potential for future COVID-19 legislation. As a former financial professional and NAIFA member in the days before he entered politics, Scott shows a strong understanding of the issues important to agents and advisors and their Main Street clients.