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So we know Republicans hate Obamacare so much that they can’t shut up about it. But don’t let their nattering on this topic lead you to think that they don’t have a long list of other most-hated things. Foremost on that list is the Dodd-Frank Act that allows the government to regulate the financial industry in order to forestall another financial crisis such as that of 2008, as well as to protect consumers of financial services. However, hostile forrays against Dodd-Frank have to be handled delicately since, given the somewhat confused populist bent of at least a fraction of the Tea Party, none of these folks want to admit that they’ve done Wall Street a solid at the expense of Main Street. Enter smarmy, make-nice, Missouri Rep. Ann Wagner (R-2).

Wagner is the author of the latest manifestation of Republican disdain for Dodd-Frank, the misnamed Retail Investor Protection Act (H.R. 2374) which just passed the House. Wagner’s bill “tweaks” Dodd-Frank in such a way that it curtails the ability of the Securities and Exchange Commission (SEC) and the Department of Labor (DOL) to make rules that protect investors:

… the Certified Financial Planner Board of Standards, the Financial Planning Association and the National Association of Personal Financial Advisors – said that it “views H.R. 2374 as a ‘back-door’ attempt to undermine investor protection provisions in Dodd-Frank and to prevent the SEC and DOL from proceeding with investor protection rulemakings consistent with appropriate cost-benefit analyses and routine interagency coordination.”

Dodd-Frank authorized the SEC to establish a uniform fiduciary standard of conduct for both broker-dealers and investment advisors, the coalition said, and the passage of H.R. 2374 “would substantially impede or completely prevent the SEC from proceeding with a congressionally authorized and long-needed rulemaking that would allow all investors to receive investment advice that is based on their best interests.

This proposed change has not only roused managers of 401(k) funds, but consumer advocates who are concerned that it could stop any regulation of investment brokers who have long been free to run amok. In addition to the groups mentioned above, others such as the Chair of the SEC, the AARP, the Investment Adviser Association, and the North American Security Administrators Association have also lobbied vociferously against the Wagner bill, asserting that it “imposes unnecessary and onerous rulemaking requirements that the Securities and Exchange Commission (SEC) must meet before it can adopt a fiduciary rule” which “not only unnecessarily slows DOL’s rulemaking, but […] potentially halts DOL’s rulemaking altogether if the SEC does not act on a fiduciary rule.”

The net result: H.R. 2374 would leave individual investors and the retirement funds of middle class Americans to the mercy of the sharks. Yet Wagner tries to present the passage of the bill as a victory for the little guy, claiming in an email to constituents that it will “preserve and increase lower and middle income Americans’ access to affordable investments.” Because, you know, in the wealthy Wagner’s country club world, regulation is known by everybody who matters to be bad. Quoted in Investment News:

Ms. Wagner said that the agencies’ “massive rule making” could raise regulatory costs and limit access to investment advice for people trying to save for retirement, college or a home.

In response to similar gibberish, Bob Clark of Think Advisor, an investment advisor magazine, replies:

Seriously? Is there really a question about whether retail investors are being harmed by what study after study has shown to be the nearly universal [and mistaken] belief that their broker has a legal obligation to act in their best interest? That the costs of acting in investors’ best interests really might somehow outweigh the benefits? Or the underlying implication that it would cost brokerage firms more to act in their clients’ best interests?

Fortunately, there are folks who remember 2008 and understand that regulation is necessary. President Obama has indicated that he will veto the Wagner bill if it makes it through the Senate – which is unlikely since the Chair of the Senate Banking Committee has said that he does not expect that the Committee will waste time on legislation destined to be vetoed.

Nevertheless, it’s not all good – 30 House Democrats voted for this gift to Wall Street, and and although that’s not a really strong bipartisan vote, it’s disheartening. And, of course, Ann Wagner is swanning around bragging about how she’s working hard for the little guy and holding this piece of drek up as evidence. As Clark noted in his article, it’s mortifying to learn that the securities industry lobby group SIFMA “could really get a Congresswoman, who tells us that ‘it’s the responsibility of Congress to intervene and stand up for hardworking American families’ to put her name on such a bill.”

Cross-posted to Daily Kos.