During a hearing called this week by the Committee on Education and Labor of the U.S. House of Representatives, Secretary of Labor Alexander Acosta offered a wide-ranging overview of the work being conducted by the Department of Labor (DOL) under the Trump Administration.

The discussion covered topics as diverse as mining safety regulations, workplace drug abuse and the potential for new overtime rules, but about 50 minutes into the hearing, Secretary Acosta got into a tense exchange with Representative Marcia Fudge, D-Ohio, who questioned Acosta on whether the DOL is effectively collaborating with the Securities and Exchange Commission (SEC) to tamp down on conflicts of interest in the advisory industry.

By way of context, since the defeat of the Obama-era DOL fiduciary rule expansion last year in appellate court, DOL Secretary Acosta and SEC Chairman Jay Clayton have repeatedly suggested that the DOL and SEC are working together behind the scenes to harmonize and strengthen advice standards and the conflict of rules applying to broker/dealers. For its part, the SEC has published a proposed “Regulation Best Interest,” which it intends to make final sometime this year. SEC Chairman Clayton has said this rulemaking package picks up where the DOL’s defeated approach left off, but critics say the disclosure-based approach taken by “Reg BI” (as opposed to an actual prohibition-based approach) is much too weak to make a real difference for investors dealing with bad-apple advisers and brokers.

With this debate hanging in the air, Rep. Fudge asked DOL Secretary Acosta directly what his agency is doing in terms of collaborating with the SEC to protect the interests of retirement and retail investors.

“For far too long, certain, not all, financial advisers and brokers have put their own financial interests ahead of the best interest of their clients,” Fudge said. “Workers across the U.S. are demanding a higher standard of care. The DOL owes it to America to put in place rules and regulations that protect these investors and ensure the quality of the advice they get. What is your plan for protecting these workers?”

Acosta responded as follows: “You are correct. Like all industries, the advisory and brokerage industries have bad actors and investors need to be protected. As you are aware, the DOL’s fiduciary rule expansion was held by an appeals court in 2018 to have exceeded the DOL’s statutory authority.”

At this point, Rep. Fudge interjected, saying she is aware of the fate of the Obama-era fiduciary rule. “I want to know what your plan is moving forward,” she said. “I only have five minutes allotted, so please move it along.”

“I’m getting to that, if you would let me finish my sentences,” Acosta responded. “The DOL is working with the SEC, which was asked by Congress to come up with appropriate responses to protect these individuals. We are communicating with them, and based on our collaborative work, we will be issuing new rules in this area.”

“When will that be, sir?” Fudge asked, to which Acosta responded that the SEC is in the process of finalizing its rules in this area. He was not able to give a time-frame for either when the SEC or DOL will take the next steps in this area.

“Just a time would be great, and you can’t give me one, so let’s move on,” Fudge said.

At this point, Fudge turned away from the topic of new fiduciary regulations and questioned Acosta about the Trump Administration’s fiscal year 2020 budget, which, as proposed, would cut the resources of the DOL by 10%. In his comments throughout the day, Secretary Acosta said the DOL would be cutting “ineffective programs” and would still be able to meet its duties under a tighter budget.