Adding to the Bush Legacy
Dec 2nd, 2008 at 7:14 pm by Susie
I know you’re shocked. Right?
The Bush administration is rushing to pass a regulation that would relax the rules on when investment advisers can recommend products sold by their own companies, despite protests from consumer groups who say the changes could put retirement savings at risk.
ProPublica has been keeping a tally of midnight regulations pushed through the rule-making process in the final days before the new administration takes power.
The proposed regulation (PDF) (scroll all the way down to page…49,919) on investment advisers comes from the Department of Labor, and builds on changes made by the Pension Protection Act of 2006, which for the first time permitted investment advisers to have conflicts of interest in two specific circumstances.
“The theory was that people don’t seem to want to pay for investment advice, so advice from even conflicted parties may be better than no advice at all,” said Norman Stein, a professor at the University of Alabama School of Law and a senior consultant to the Pensions Rights Center.
The 2006 law created two avenues for advisers — who are legally required to act in the interests of their client — to recommend products that benefitted themselves or their company.
And we see how well that worked with the mortgage industry!
