President and CEO of the National Black Chamber of Commerce (NBCC) Harry C. Alford is calling President Obama and the Department of Labor’s proposal for regulatory financial advisers “harmful” to many in that marketplace.
“The new DOL regulations will likely result in fewer commission-based services in the marketplace, leaving only fee-based and managed account services that are not affordable options for many individuals in our communities,” Alford said in a letter addressed to Congress and Department of Labor Secretary Thomas Perez.
The National Black Chamber of Commerce lobbies on behalf of 100,000 black-owned businesses. Harris said the Obama administration’s proposal would produce more regulatory burdens for small businesses, and would increase costs for low-income Americans seeking financial advice.
Harris is calling on Congress and the DOL “to evaluate the economic impact of this proposal on small businesses and re-propose this harmful regulation.”
The Obama administration believes more disclosure requirements are needed to protect consumers from financial advisers who might be earning commissions from selling financial advice.
However, two Congressional Black Caucus (CBC) members came down hard on the new regulatory proposal in July, arguing that the new regulations are unnecessary.
Reps. Lacy Clay (D-Mo.) and David Scott (D-Ga.) signed onto a bipartisan letter that criticized the Obama administration’s new regulatory rules proposal.
“You can sit in an ivory tower and make up all of these seemingly wonderful things, but they don’t have practicality of making sure it doesn’t suffocate our financial system,” Clay told thehill.com. “Furthermore, the people who are hurt the most with this proposal are those in the lower income stream and the middle income stream.”
The Congressional Black Caucus also sent a letter in March 2013 to the Department of Labor urging that more regulatory requirements would harm minority communities and businesses.
Aided by the Black Chamber of Commerce, there is a growing number of Democrats in the House and in the Senate coming out against Obama’s new regulatory proposal.